5 Advantages Of GST For People Working In Health Care sector
The COVID-19 pandemic has brought the healthcare sector back into focus. The Government has been quick to respond to the ongoing crisis with various schemes to nullify its impact on the economy in general and the healthcare sector in particular. The flurry of reforms started with the most prominent financial change, one which led to a complete overhaul of the taxation system of India, the Goods and Services Tax, or GST.
GST has far-reaching implications across all sectors of the economy, and the healthcare sector is no exception. It ushered in an era of ease, flexibility, and transparency.
This article takes up the top-5 gst benefits that you can avail if you are or intend to be a part of the healthcare system of the country.
Amalgamating all Taxes Into One Unique and Simple Tax
India’s infamous tax structure was a cause of trouble for big and small players alike. Previously, like many other sectors, the Pharma and Hospitality sector had to pay different taxes, such as Central Excise, Customs Duty, VAT, Sales Tax, and at least six other types of taxes.
It also had a cascading effect as often one product or service was taxed more than twice at various levels. The result was poor financial management, reduced profitability, and increased debt.
GST made the concept of paying multiple taxes a thing of the past. Firms operating in the Healthcare sector can now pay taxes at the originating place of the good or service and leave all tax-related worries behind.
A result of this increased convenience is that organizations now have more disposable cash, as reflected on their balance sheets, resulting in better availability of working capital.
As a professional engaged in the Healthcare sector, you can expect the organization to pass on the benefits in the form of a raise in salary, perks, or other dearness allowances.
Wide Ambit of GST-Exempt Status
GST framers took into account the critical role healthcare professionals play in society. As a result, many specialists and professionals have been kept out of the ambit of GST, and therefore, do not have to register themselves.
The professionals and services that do not need GST-registration are as follows:
- All healthcare services, except specialized services like hair replacement, plastic or cosmetic surgery, and the likes, are exempt from GST.
- All medical practitioners, except those providing hair transplant or surgery, authorized by recognized medical councils, do not need to pay GST.
- All paramedic staff like nurses, technicians, and the likes are exempted from GST.
However, doctors who also provide non-healthcare services along with healthcare services, and whose annual income is more than INR 20 lakhs, need to file GST.
Reduction in Technological Upgradation Cost
As India is a significant importer of modern medical equipment, the duty component often increases the price of the goods by a substantial margin. GST simplifies the tax structure by making a provision for claiming tax credit on the duty.
Hence, medical practitioners will now spend lesser than they spent on importing machinery and equipment in the previous tax regime. The amount thus saved can be spent on offering a better work environment, higher compensation package, and technological advancement.
Happy Days for Medical Tourism
India is home to both modern medicines as well as traditional medical practices like Unani, Ayurveda, and Homeopathy. The Indian art of yoga and ayurvedic medicines have impressed and will continue to influence many generations.
As GST brings down the costs of insurance, pharmaceuticals, travel, and healthcare, international and domestic patients will throng places that offer high-quality medical services.
This will create excellent opportunities for practitioners and professionals engaged in both conventional as well as modern medicine fields.
Less Legal Hassles
Before the implementation of GST, businesses and individuals had to understand the mechanism and formalities of multiple state and central taxes.
Various taxes meant chances of multiple disputes that would often lead to numerous litigations. All this created confusion and the precious time of petitioners got wasted in the process.
GST is a fully online process, which means any dispute can be taken up quickly, and one may expect speedy redressal of all grievances. The time thus saved can be spent on productive activities like self or organizational development activities.
Professionals who are a part of the GST-exempt category need not worry much. For the rest, a quick gst check can simplify the process. As GST is still at a novice stage, you can expect more helpful reforms along the way.