Controversial luxury tax for ICU patients in Karnataka Withdrawn

Mangalore Today News Network

Bengaluru, Jan 20, 2016:  In face of stiff disapproval from the public and the medical fraternity, the Karnataka government has decided to withdraw the controversial 8% "luxury tax" on patients treated in Intensive Care Units in the state’s hospitals.

 

Health minister U T Khader today said Chief Minister Siddaramaiah has requested the finance department to withdraw the tax. The official notification will take time, but the tax will not be imposed, he added.

Earlier, the government had decided that patients being treated in the Intensive Care Unit of any hospital where the nightly charge is more than Rs. 1,000 (which would cover most hospitals) will have to pay an extra 8 per cent as luxury tax.

The government’s rationale was that rules make luxury tax applicable to rooms having air conditioners.

The hospitals, which contended that ICUs are air-conditioned not for luxury but to ensure sterile conditions, had not passed on the tax to patients.

They had also planned to formally appeal to the government to reconsider the issue.

Under the tax laws of the state, there it has a sub-section called Luxury Act for hospitals, which says a room with an AC, television, bed for attendants and such facilities, which are charged at Rs. 1000 and above, should be subjected to the 8 per cent tax.

But there was always an understanding that the ICU was not a place for luxury, Dr Nagendra Swamy, President of the Private Hospitals Association had told NDTV.

If levied, the luxury tax on ICUs would have brought in an extra revenue of nearly Rs. 15 to 20 crore per year.

 

Courtesy: NDTV