Union Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2011-12, has announced that the Service Tax on Health check up or treatment imposed in 2010-11 would now be replaced with a tax on all services provided by hospitals with 25 or more beds that have the facility of central air-conditioning.
Emphasising that though this Service Tax is on high-end treatment, Mukherjee said that there would be an abatement of 50 per cent so that the actual burden is kept at 5 per cent of the value of service.
The Finance Minister said that the levy would be extended to diagnostic tests of all kinds with the same rate of abatement. All Government Hospitals would be outside this levy, the Minister added.