Healthcare under Service Tax

Date: 01 March 2011

Did you know that our country produces the largest number of young widows due to unaffordable healthcare?

Now, Indian Government wants to burden you with an additional 5% service tax on healthcare. What are its implications? It simply means that if you undergo any heart operation and spend Rupees one lakh for the surgery, then you must pay Rupees 5,000 more to the Government as service tax. If you are unfortunate to be diagnosed with cancer and have to undergo a major surgery, followed by radiotherapy and chemotherapy, be prepared to shell out an extra 20,000 Rupees as Service Tax alone.

This is not "Service Tax", it is a "Misery Tax" since the Government wants to make money out of your misery. Please do not think that only rich people will be taxed since the proposal says only air conditioned hospitals need to pay the tax. No surgery, simple or complex, can be performed without an air-conditioned Operation Theatre. Legally, a blood bank cannot get license without air-conditioning. CT, MRI and Catheterization labs do not function without air-conditioning. Simply put, hospitals cannot function without air-conditioning!
Why our Government does not have the moral right to tax health care?

1. Our Government spends less than 1% of the GDP on health care. The only major Asian nation which spends less than our Government is Pakistan. Even the Governments of sub-Saharan Africa spend more for health care than us.
2. 80% of the health care cost of the nation is paid out of your pocket with hard earned money.
3. Today, almost 90% of those in need of tertiary treatment die a slow and painful death because they cannot afford surgical treatment. The remaining ten percent of the people who can afford end up spending a better part of their life's savings for treatment.
4. Even poor villagers who pay 5 to 10 rupees per month for micro-health insurance must pay 10% service tax. Service tax on health insurance will only make health insurance unaffordable for the 'Aam Aadmi'.
If you want to prevent heart attack or cancer and want to undergo preventive health check up, you will have to pay an additional Rupees 500 to the Government. This is the best disincentive to people willing to consider preventive health check up. Health care cost is the commonest reason for the rural indebtedness. One sick person in the family can bring them down below the poverty line perpetually.
The main reason for the high cost of health care in India is the already existent high tax component, without even considering the proposed service tax. Hospitals pay central sales tax, custom duty, luxury tax, entry tax, VAT, excise duty and electricity bills at the highest tariff levels. Approximately, 25% of the construction cost of the hospital goes to the Government in some form of tax. With all these prevailing Government taxes, how can the hospitals provide affordable health care to you?

Let's choose 12th of March as the 'Misery Day'. On this day, all the citizens of your State must gather near the Governor's house in the State capital with a petition to roll back the proposed Service Tax.

Please carry banners saying:
"British Raj taxed salt and our government taxes our miseries"
"Please roll back health care tax"
"It's not about service tax, it's about affordable health care"

You need no leader to guide and organize. Each one of you is a leader. Please contact everyone you know by phone or SMS and ask them to assemble near the Governor's house at 11 AM on the 12th March. Please address the media with facts. We are not against any Government or any political party. We want the right policy to make health care affordable to the 'Aam Aadmi'.

1. We want Service Tax, both old and new, to be withdrawn for all variety of services including diagnostic services, payment by insurance companies etc.
2. We want all varieties of taxes like central sales tax, custom duty, VAT on health sector to be withdrawn for at least ten years till all citizens have access to affordable health care.

We have a dream to see India becoming the first country in the world to dissociate health care from affluence and we want this to happen within our life time. Only we can do it, because we produce 28 million babies a year, who if educated well, can create an thriving industry with the Government's support. If we do this, we would have lived up to the dream of our leader Jawaharlal Nehru "to wipe away every tear from every eye".
For more information, queries and suggestions, please contact me at devishetty@hrudayalaya.com

A corrupt government cannot give minimum healthcare to its citizens and yet taxes those who squeeze money to meet their medical expenses.
Not everybody who goes in for heart operations can afford it and yet they have to undergo the same if they want to live.
And yet the pauper, corrupt criminal controlled government makes you pay tax on your bills.
Let us all unite to oppose this tax.

Sent by U Banerjee, NP