Govt rolls back 5% service tax on healthcare

New Delhi: March 22, 2011

Faced with criticism from the Opposition and the medical fraternity, Finance Minister Pranab Mukherjee rolled back the proposed five percent service tax on healthcare announced during the federal budget for 2011-12. "I have decided to exempt the new levy in its entirety, both in respect of services provided by hospitals as well as by way of diagnostic test until GST (Goods and Services Tax) comes into force," Mukherjee said in the Lok Sabha. In the federal budget for 2011-12, the Finance Minister had proposed to levy five per cent tax on services provided by hospitals with 25 or more beds that have facility of central air-conditioning and on diagnostic tests of all kinds.

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