13 July 2011
Finance Minister Pranab Mukherjee had in Budget 2011-12 proposed extending service tax on diagnostic tests and medical services provided by a centrally airconditioned hospital that has 25 beds or more. He, however, allowed a 50 per cent abatement, so that the tax rate would work out to 5 per cent.
While the rationale was to complete the tax credit chain, it came in for public and industry criticism. Significantly, the National Human Rights Commission also expressed its disapproval last week.