India is one of the largest countries in the world in regards to healthcare and medical tourism, owing to its exceptional technological advancements and affordable, yet effective medical solutions. The Indian pharmaceutical industry is the 3rd largest in terms of volume across the globe, and with the growing population, the sector is bound to grow further. In the present day, 5% of the country’s GDP is spent on the Healthcare sector, which by the end of 2017 is touted to touch $150 bn. With a sector that is growing rapidly with the introduction & development of new technologies, the healthcare sector is among the few sectors that will always attract fresh new business ideas.
Possible Effects On The Healthcare Sector
However, with the recent implementation of the Goods & Services Tax, the healthcare sector, much like the others will go through a paradigm shift. Having grabbed the attention of the nation for overhauling the existing tax system, the GST will have a significant impact on the pharmaceutical sector, thanks to its massive contribution to the country’s GDP. The implementation of a uniform tax system could have a constructive effect on the healthcare sector, which is a positive sign for business entrepreneurs wishing to venture into the following domain. With 8 different taxes being imposed on the sector in the present day, the introduction & implementation of the GST will significantly help the sector to streamline the process. By reducing the cascading effects of the various taxes that are imposed, the GST would help in having a much more efficient supply chain system and effective operational efficiency, which is going through a permanent lapse at the moment. While the distribution networks and supply chain management systems of all the pharmaceutical organisations will have to be worked upon with respect to the new taxes, the sector can expect to see a much lower manufacturing & transaction costs which can prove to be beneficial both for the organisation & its customers. The GST most likely will also reduce the cost that is being spent on healthcare technology, which more than often if imported from other countries.
Additionally, the implementation of GST will envisage a seamless flow of tax credit, along with improvement in overall compliance; but not everything might be hay and sunny with the implementation of the GST. The pharma sector has serious concerns over the rate of GST that may be put under implementation, considering how anything over 12% could not have the desired effects on the sector. With a tax slab over 12%, industry experts speculate that the pricing in the pharma & healthcare sector will take a temporary (hopefully) hike. Along the same lines, it is uncertain if various medical devices and life-saving drugs will continue to be exempted from taxation once GST is implemented.
What One Can Deduce?
While the overall impact of GST on the Healthcare segment is still indeterminate., industry experts and analysts visualise it to be a win-win situation. Business entrepreneurs who wish to give their new startup ideas flight are in for a treat considering all the favourable reforms that are bound to be implemented in the pharmaceutical sector. With the removal of all the complexities and hurdles, business entrepreneurs can scale their ideas in an industry which is on the path of increased productivity and exponential growth.
Effect & Influence Of GST on Medical Tourism
India has always been on the forefront of medical tourism since aeons, thanks to the technological and competitive advantage India has over the First world countries. With one of the largest workforce’s in medicine, India can brag of delivering exceptional medical services to individuals at many affordable prices. Estimated to bring a revenue of $2 billion this year, the medical tourism department is bound to have a positively significant influence with the implementation of the GST. With the implementation of GST, the cost of pharmaceuticals, insurance, and quality health care is touted to dip down significantly that can bring better prospects for medical tourism in the country. Considering these facets, young business entrepreneurs who are starting their ventures centred around Yoga, Ayurveda, Homeopathy and Acupuncture can expect a positive effect with the rolling out of GST which is bound to significantly contribute towards the growth of medical tourism in the country.
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