India Scraps 'Misery Tax'

March 22nd, 2011
in econ_news

India Max_hospital Econintersect:  There had been a proposal to apply a tax in India on diagnostic tests and treatment rendered in air-conditioned hospitals.  This was dubbed the health 'misery' tax.  It seems that it might better be called the 'health luxury tax', but the point is now moot:  Finance minister Pranab Mukherjee on Tuesday decided to drop his contoversial budgetary proposal.

Follow up:

From The Times of India:

The tax on healthcare, dubbed by many as a ''misery tax'', had come in for criticism from hospitals as well as Congress members on the grounds that the government was taxing a basic necessity even when it did not provide medical treatment facilities to all the citizens.

On March 1, a day after the Budget, TOI was the first to report that the unpopular proposal would be dropped. The finance ministry was hoping to net Rs 700 crore from this ill-concieved measure.

Replying to the debate on the Finance Bill on Tuesday, Mukherjee admitted: ''The levy on healthcare has raised considerable anxiety in the House and outside...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 tests until GST (goods & services tax) comes into force.''

Source:  The Times of India

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