Pressure mounts on Pranab to roll back 'sick' tax

Finance minister Pranab Mukherjee's 5 per cent service tax on health check-ups and treatment has been sharply criticised not only by hospitals and healthcare professionals, but also by general industry bodies like the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industries.

The Associated Chambers of Commerce (Assocham) is also expected to register its protest.

The chambers have appealed to Mukherjee to roll back the service tax and accord infrastructure status to the health sector. While FICCI has shot off a letter to the finance minister in this regard over the weekend, CII officials have said they are in the process of drafting a similar letter.

Ostensibly aimed at high-end treatment, the move will actually hit poor patients hardest. The levy applies to centrally air-conditioned private hospitals (with 25 beds or more) and diagnostic labs; but as FICCI points out, it would have a negative impact across the healthcare spectrum.

It said that air conditioning in hospitals was an essential need, not a luxury. This was substantiated by the National Accreditation Board for Hospitals guidelines, which do not provide accreditation to hospitals without central air-conditioning - split or window air-conditioning increases the risk of infection in the hospital.

The service tax measure would deter hospitals from going in for central air-conditioning, leading to an increase in the already high infection rates in many hospitals.