In the 47th meeting of the Goods and Services Tax Council (GST), the Government of India imposed 5% GST on hospital room rent of INR 5K or more. This 5% GST on hospital room rent will be applicable from 18th July 2022.
The government has not levied an indirect tax on healthcare sector services because they understand the importance and purpose of reducing the cost of healthcare services. Putting taxes on healthcare services could immediately affect the general public by raising the cost of healthcare treatment.
To make you understand the impact of GST on hospital rooms, we have given an overview of hospital room rent
- This 5% GST does not apply to intensive care units (ICU).
- No GST will be applied if the room rent is less than INR 5K.
Impact of GST on hospital bills
|
Earlier |
Now |
|
GST on Room Rent Per day INR 4K |
GST 0% |
|
Room Rent Per Day INR 5K |
GST 5% |
For example: Let's say your room rent is Rs 6k per day, then your hospital will cost Rs 18900 for 3 days. This means Rs 18K for room rent and Rs 900 for GST.
What should Policyholders Do?
The cost of hospital rooms is limited under many health insurance plans. This limit can be based on co-payment, where the insured has to pay a portion of the room rent out of his own pocket or based on the restriction of certain types of hospital rooms.
In some co-pay cases, policyholders must pay a portion of the room rent, including the GST amount. To avoid these situations, we recommend you choose a health plan that offers no capping on room rent. Read the policy document carefully before buying health, so you do not have to make surprise payments.
Who Will Pay The GST Amount?
The entire hospitalization cost will be borne by the health insurance company, which means that the chargeable GST will also be paid by the insurer and will not affect the policyholder during claim settlement.
Conclusion
The decision to impose GST on health services is expected to have many side effects. As per the justification given by the government, 5% of GST will be applicable only on rooms that cost INR 5K or more. So, unprivileged people will not be affected by such taxes. But, it is good to buy a health plan with no capping on the hospital room rent, and then you don't have to worry about GST on room rent.