Govt rolls back 5% service tax on healthcare

New Delhi: Bowing to demand from all quarters, Finance Minister Pranab Mukherjee on Tuesday announced withdrawal of the proposed 5 percent service tax on airconditioned hospitals with more than 25 beds and on diagonistic servicesThe purpose of the new levy (healthcare) was not merely to mobilise revenue, but to pave the way for introduction of the GST.

"However, I have decided to exempt the new levy in its entirety both in respect of services provided by hospitals as well as by way of diagnostic tests until GST comes into force", Mukherjee said while moving the Finance Bill in the Lok Sabha for consideration and passage.