VAT Breather for Hospitals and Nursing Homes

The decision to collect Value Added Tax (VAT) from hospitals and nursing homes has been put on hold for the time being.

The Delhi government, in a half-page advertisement issued on February 24, had warned hospitals and nursing homes to pay VAT to avoid action.

“We had a meeting with the finance department today (Wednesday) and asked them to think it through before coming to a decision. Hospitals do not provide all the medicines and most are bought by patients from private pharmacies that charge them the applicable taxes. In such a scenario, the notice needs to be analysed,” Delhi health minister AK Walia said.

Walia said it was decided in one of the VAT meetings to exempt health and education sectors from these taxes. “We will have another meeting in on the matter to decide on the further course of action,” said Walia, who met members of the Delhi Medical Association (DMA) on Wednesday.

The advertisement had said that “administering drugs, inserting implants, dental prosthetics and artificial limbs in patients’ tests and treatments are sales and taxable”.

“The government labeled hospitals and nursing homes as ‘dealers’ in the notice which is highly deplorable. We provide medical services. Administration of drugs and implantation of devices is an inseparable part of the treatment. Nursing homes and hospitals are not selling medicines for which there are chemist shops,” said Dr Harish Gupta, president, DMA.

Hindustan Times, New Delhi, 07-03-2013