With the introduction of Goods and Service tax, a single tax is applied on the plenty of goods and services in India which is implied right from the manufacturer to the end consumer. The tax is implied on value addition on each stage, while the end consumer will only pay the tax levied by the last dealer in the supply chain.
The GST bill which passed last year has generated a lot of curiosity in the country. It promises to streamline the tax structure in India. Until then several indirect taxes were applied on the finished goods which in turn use to increase the final cost encouraging imports. Through the Make in India initiative, the lower priced goods for the Indian citizens are manufactured and promoted.
The Indian Healthcare industry is now among the major sectors with respect to revenue and to employment. India’s Pharmaceutical Industry as of now is 3rd largest as far as volume and 14th largest regarding esteem all inclusive. With the increase in the expenditure on healthcare, there were increased revenues from the taxes. GST implementation could subsume various taxes of the complex tax system in the country into one uniform tax system.
In India, 5% of the GDP is spent on Healthcare of which 4% is spent by the private sector. Indian HealthCare Industry has been exponentially developing in the current years and the Ministry of Health focuses on the advancement of 50 new innovations. There will be a boost in the vaccinations and other health care related treatments related to cancer and tuberculosis. To draw more Foreign Direct Investment the FDI initiated for brownfield Pharmaceutical investments to 74%. Whereas 100% FDI is allowed in greenfield Pharmaceutical Investment.
In a broader view, the Healthcare Industry particularly the Pharma sector is imposed with 8 different types of taxes which makes the goods price higher. Compressing the taxes as one may be quite a beneficial decision for the consumers as well as the manufacturers and dealers. The benefits do not limit to the retailers and the wholesalers, the online medicine apps giving an opportunity to buy medicines online can also get the benefits reach the maximum people with cheaper substitutes and original products.
While the government has also stated to give the essential and basic medicines at affordable prices to the maximum audience, the consumers are having an opportunity to get the modified healthcare services and goods at affordable prices. At the moment healthcare is part of the negative list which keeps its free of any service tax levy.
Concluding the same, GST is a win-win situation for both the manufacturers and the consumers! With the implementation of GST, the fluctuating rates of the taxes involved in the healthcare goods will no longer affect the goods and services.