Telangana government had planned to enrich its coffer by imposing 10% luxury tax on 2,500 odd private hospitals under Telangana Private Hospitals and Nursing Homes Association (THANA). The G.O was brought in August 2015. Earlier it would be only for the corporate hospitals but was made to cover all the hospitals then.
However, the GST will nullify this Tax which is considered as a ‘Cruel Tax’. For the past few months, Commercial Taxes department personnel started issuing notices to hospitals in the city and other parts of the state to register themselves with them. GST — whenever it is rolled out in the country — will take over the collection of luxury tax from the Telangana state government.
GST will also replace other local level taxes like State Value Added Tax/ sales tax, entertainment tax, purchase tax, octroi and entry tax. In other states, the luxury tax is levied only on corporate hospitals. Telangana had started imposing the same tax on small and medium private hospitals in Telangana which ensured patients paying up excess bills hospitals would be forced to pass on the tax burden to them
