MPs to raise pitch for withdrawal of tax on medical treatment

New Delhi: Members from different political parties, including Congress, are expected to raise the pitch for withdrawal of service tax on private hospitals during the debate on the Finance Bill in the Lok Sabha tomorrow.

In the face of protests against 5 per cent service tax on healthcare in centrally air-conditioned hospitals, Finance Minister Pranab Mukherjee indicated that the government may be open to revisiting the proposal in the Budget for 2011-12.

"Since the presentation of the Budget 2011-12, I have received several suggestions and representations, including valuable feedback from Members (MPs) on taxation proposals.

These are under examination," he had said while replying to the discussion on the Budget for 2011-12.

The minister further said that he would respond to the issues in his reply to the discussion on the Finance Bill, 2011.

During the general discussion on the Budget last week, almost all political parties wanted the Finance Minister to withdraw the controversial proposal, which has even been dubbed as "misery tax".

The minister may also announce changes in some other tax proposals, especially the extension of 18.5 per cent Minimum Alternate Tax (MAT) on SEZ units and developers, who have been critical of the levy.

He may take a fresh look at the proposed 10 per cent excise duty on readymade garments as well. The garment traders criticised the mandatory 10 per cent excise duty on readymade garments, saying it would hurt the small business.

Mukherjee, who had unveiled the Budget proposals on February 28, is expected to reply to the discussion on the Finance Bill on Wednesday.

The debate on the Finance Bill, which contains tax proposals, is likely to be marred by the controversy generated by the WikiLeaks expose last week over the cash-for-votes scam and other issues.

Mukherjee`s direct tax proposals are expected to result in a revenue loss of Rs 11,500 crore, while the indirect tax proposals are expected to yield additional revenue of Rs 11,300 crore in the 2011-12 financial year.

The passage of the Finance Bill in Parliament would end the three-stage budgetary exercise for 2011-12.

If needed, sources said the Rajya Sabha would even sit on Saturday to complete the budgetary exercise within this week.

The Lok Sabha has already completed the second stage of the budgetary process with the passage of the demands for grants last week.

In view of the elections in five states (West Bengal, Assam, Kerala, Tamil Nadu and Puducherry), the government had earlier planned to conclude the Budget session on March 25.