GST Healthcare: More transparency expected as unbundled bills find Way

The proposal suggests generating separate bills for components that are exempted from Goods and Services Tax in the healthcare sector, where the revenue department suspects evasion of GST by hospitals.

GST in Healthcare will soon become more transparent as the GST Council is mulling over introducing Unbundled Bills in the healthcare sector which may get extended to other exempted arenas too. (Getty)

GST in Healthcare will soon become more transparent as the GST Council is mulling over introducing Unbundled Bills in the healthcare sector which may get extended to other exempted arenas too. As discussed in the GST Council Meeting concluded last Saturday i.e. 22^nd December 2018, the current billing system does not bifurcate taxable and non-taxable goods and services. The proposal suggests generating separate bills for components that are exempted from Goods and Services Tax in the healthcare sector, where the revenue department suspects evasion of GST by hospitals. If the recommendation is approved, consumers may see separate bills for medicines, hospital charges and consumables, clearly demarking where GST was charged and which items were exempted. At present, it is a common practice at hospitals, whether large or small, to sell medicines at MRP (Maximum Retail Price); however, the same is procured at discounted prices and the benefits are not passed on the end-user. Similarly, there are a surfeit of medicines and medical services that are exempted from GST, however, due to mixed supply billing the end user may not benefit from such exemption. Although the proposal was for the healthcare sector only, the GST Council wanted to adopt it for education sector too, where basic education is exempted from Goods and Services Tax, but goods and services not incidental to education are not. The unbundled billing for exempted components will make the understanding and impact of Goods and Services clearer to consumers and will help lessen the hue and cry around Goods and Services Tax, while ensuring that the GST charged on taxable components reaches the Revenue department with much ease. Experts are of the view that before implementing the recommendation for Unbundled Bills and making it mandatory, the GST council must review its stand on composite supply and mixed supply in order to avoid any fallout later.