Govt of Karnataka enforces and withdraws luxury tax on ICUs..

Missed this bit. Coup,e of days ago, Karnataka Govt imposed luxury tax of 8% on ICUs. Now it seems the tax has been withdrawn amidst protest.

What brought the tax?


The state government has imposed an eight per cent luxury tax on each bed in an ICU. Last week, the department of commercial taxes sent a directive to all hospitals across the city stating: “The accommodation provided in an ICU charging more than Rs 1,000 per day per room attracts luxury tax at the rate of eight per cent under the Karnataka Tax on Luxuries Act, 1979.” What the directive means ‘per room’ is per bed. The hospitals without doubt will pass on the burden to the patient.

The daily rate in an ICU in a private hospital usually ranges from a minimum of Rs 2,500 to as much as Rs 5,000+. So the daily burden on the patient and family would go up in the range of Rs 200 to Rs 400. A copy of the order was signed by commercial tax commissioner Ritvik Pandey six months ago but is being strictly put into effect now.

The commercial taxes department has, however, justified its action, stating it is in sync with the rule book. A senior official said: “This is in continuation of the existing order that prescribes imposition of luxury tax on deluxe and super-deluxe rooms of hospitals. The hospitals collect more money from patients on the pretext of providing various facilities in these rooms and it is natural that these have to be taxed.”

A reputed oncologist, who did not want to be named, said: “How can the government treat an ICU as a hotel room or a private ward in a corporate hospital? The patient in an ICU is usually battling for life and not wallowing in comfort. How can we tell the family members of the patients to pay luxury tax when they are actually hoping for a miracle? This order is nothing short of a state-administered euthanasia programme!”

Not sure how to react to all this..

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