No, Centre Hasn't Imposed Service Tax On Healthcare Industry In Budget 2023

A letter referring to a 'misery tax' allegedly imposed by the Centre talking about a five per cent tax on healthcare in the recent budget is going viral across social media. The letter is being shared with the claim that it is a "shameful" move by the Government to impose taxes on healthcare.

Claim:

The viral letter is attributed to Dr Devi Shetty of Narayana Health. The letter reads, "If you undergo any heart surgery, you must pay Rs 5,000 to 10,000 or more as service tax. If you are unfortunate and suffer from cancer, then you will be charged anywhere in excess of Rs 20,000 as service tax."

"It is the Government's duty to provide us with affordable healthcare instead of increasing the cost by adding more taxes. Even our poorest villagers who pay Rs.5 to 10 for micro health insurance are charged 8% service tax."

The letter continues, "We must all act against this injustice. So, let us choose Saturday, March 12 as Misery Day'. I request every citizen to assemble at 11 am near the Governor's house of every state with a petition to roll back this Misery Tax'. Please pass on this request to everybody you know."

Indian filmmaker Rakesh Sharma shared the letter with the caption, "Why must Government profit from citizens' misery? Roll back all taxes on medicines, medical tests, lab work, MRI/ CT scans, surgeries/ operations, criticare, cancer treatments etc. And - no #GST on medical insurance! It is shameful to levy any taxes on healthcare!"

Surjya Kanta Mishra, a Polit Bureau Member of the Communist Party of India (Marxist), shared the image of the letter with the caption, "Assemble, Protest to demand and achieve the withdrawal of Misery Tax on 'Misery Day' March 12 2023."

The Logical Indian's Fact Check Team received a fact check request for the same. The viral video has been widely circulated across WhatsApp.

The letter is viral across Facebook as well.

Fact Check:

We conducted a reverse image search on the viral image and found a blog post uploaded on March 6, 2011. The blog post is titled, 'Devi Shetty Writes To The Aam Aadmi' and talks about noted heart surgeon Dr Devi Shetty urging people to observe March 12 2011, as "Misery Day".

"Against the Union Government's proposal to impose additional 5 per cent service tax on healthcare provided by the private hospitals. Aptly he termed this new tax as 'Misery tax'," the report notes.

To check the context behind this, we conducted a keyword search and came across a Times of India report published on February 28, 2011. The report is titled, 'Union Budget 2011: Healthcare industry fumes over service tax proposal' and talks about the Government's proposed imposing a 5 per cent service tax on treatment in private hospitals, paid either by individuals, insurance companies or firms.

The then Finance Minister Pranab Mukherjee is quoted as saying, "I (therefore) propose to replace it with a tax on all services provided by hospitals with 25 or more beds that have the facility of central air-conditioning. Though the tax is on high-end treatment, I propose to sweeten the pill by an abatement of 50 per cent so that the actual burden is kept at 5 per cent of the value of service."

We then checked Mukherjee's 2011-12 Budget Speech and found the relevant portion. The former Finance Minister had proposed a five per cent service tax on hospitals with 25 or more beds and have the facility of central air-conditioning. The exception was made for government hospitals.

We conducted another keyword search and found a report by MidDay published on March 13, 2011. The report noted that heart surgeon Devi Shetty wrote an open letter calling the proposed service tax hike "unfortunate" and seeking observance of March 12 as 'Misery Day' to protest it.

Another report by Bangalore Mirror, published on March 5, 2011, quoted the entire letter written by Dr Shetty.

As per a Deccan Herald report published on March 9, 2011, Devi Shetty met the former Finance Minister and appealed to him to withdraw service tax on the healthcare industry.

The bill was later rolled back, to which Dr Shetty responded by saying, "I am happy that the finance minister has decided to roll back the service tax. I met the FM two weeks ago, and at that time, he was of the view that the tax would hurt the common man, and he would like to do something about it."

We also came across an interview of Shetty with CNBC, where he discussed the service tax, and in the interview, the left side of the video shows the letter reportedly written by him.

In the 2023-2024 Union Budget presented by Finance Minister Nirmala Sitaraman, Service Tax on Healthcare is not included. Further, service tax is now subsumed under the GST

Conclusion:

The viral letter is not from a recent Budget for 2022-23, and the letter pertains to the proposal made in the 2011-12 Budget, where the central government introduced a service tax on the healthcare industry. The move was later rolled back following opposition from the private healthcare industry represented by Dr Shetty. Hence, the viral claim is misleading.

If you have any news that you believe needs to be fact-checked, please email us at factcheck@thelogicalindian.com or WhatsApp at 6364000343.

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