The $7-billion Indian medical devices industry is contemplating that the yet to be announced GST rate for it would be around 5 per cent, but given the affordability issues and the number of poor people in the country the rate should be zero, said Sanjay Bhutani, Country Manager, Bausch & Lomb India.
“There are couple of things which require governments attention. First is that the GST rate on the medical devices should be 0%. In the current regime the hospitals are exempted. In exempt category the hospitals are buying services, pharmaceutical products and medical devices but in the end they are not allowed to charge it to the patient. So the patient is not aware and he feels that the healthcare services that he is getting from the hospital are at a zero rate but it is embedded into the bill,” Bhutani was quoted as saying by ETHealthworld in a recent interview.
“In a country like India where affordability is an issue, I think 9 and 10 percent is quit high as compared to other countries in the world. My recommendation would be instead of exempting the hospitals it
should be a zero based GST rate. The laws should be simpler for the hospital to claim their refund. Countries like Canada, Australia, and Singapore have introduced GST,” he added.
The Bausch & Lomb India Country Manager also feels that if the private hospitals in India have a zero rate then they will have a level playing field. “The compliance rules are much simpler and the administration part should be easier for them to claim the GST refund.”
He also points out the affordability issue to prove his point on zero GST for medical devices.
“As a medical device industry there are a lot of demos required. It is not easy to sell any equipment without the doctors or the clinics having the first hand view of the product. So they would require a demo. Right now the draft tell that there would be a GST on the demo equipments which would unnecessarily increase the cost even if it is claimable which would unnecessarily block the working capital of the medical device industries,” he said.
“Demo for 30 to 60 days should be exempted from paying GST and if it is beyond 60 days then you can always claim back. So the government should also look at what needs to be done with the demo,” Bhutani added.