GST – Goods and Services Tax – the economic game changer and India’s most significant tax reform came into effect at the stroke of 12 on July 1, 2017. Proclaimed as the “Good and Simple Tax”, GST comes with the promise of unifying the tax structure of the country. It promises to deliver complete transparency, encouraging tax compliance across the business landscape. BENEFITS OF GST This financial reform is well on its way towards making India a business-friendly nation and its benefits are humongous: Delivering uniform taxation across the country and increasing tax compliance Easing the pressure of Indian entrepreneurs, especially as a result of leveling the business playing field Simplifying business operations and efficiency within connected ecosystems – such as supply chains Providing every player of the business field with complete financial visibility of the entire business field GST AND HEALTHCARE All business verticals are currently facing hurdles in making the transition from a multiple taxation system to a stringent and organized tax structure. But the healthcare industry has reasons to celebrate since the government has decided to exempt healthcare from GST, given the vertical’s contribution in enabling the welfare of the nation’s population and the boom that the Indian medical tourism will experience in the coming years. However, the industry will still witness quite a significant disruption over the coming months because of the complete revisions in their business models that the tax, accounting, and financial operations of healthcare stakeholders would necessitate. Moreover, since some of the healthcare affiliates – the pharma and medical devices industries – and some of the services would still come under GST’s purview, the healthcare landscape is definitely going through an upheaval. Let’s look at some of the GST-related changes in healthcare. HEALTHCARE SERVICES Healthcare services delivered by hospitals, clinics, and other health-related organizations are exempted from GST. This move is expected to allow the vertical to focus on developing innovative technologies that enable timely diagnosis and treatment of diseases. Certain “outsourced services” such as cosmetic procedures and treatments, however, do fall under GST’s purview Hospitals might also be required to absorb the effect of some of the expected increase in cost – especially for medications LAB AND DIAGNOSTIC SERVICES GST will not be levied on diagnostic services However, this vertical is expecting a marginal tax hike for certain products and services. GST is expected to be beneficial for imported medical equipment in terms of delivering considerable cost reduction However, services such as MRI and CT scans are bound to get costlier PHARMA The cost of critical care medications and products (e.g., insulin for diabetes and antiretrovirals against HIV) will reduce Certain essential medicines are likely to cost more. HEALTH INSURANCE Health insurance?related GST is expected to increase marginally, but its effect on the healthcare provider?insurance interaction is not clear. IS YOUR HEALTHCARE ORGANIZATION GST READY? It’s definitely clear that, despite the GST exemptions for healthcare, there are indeed significant exceptions and the rules of the landscape have changed – it’s not just a simple change you need to make in your invoicing system. The healthcare players clearly need to ramp up their technological infrastructure to become GST compliant. These initial days of GST are bound to be tough because of the drastic changes you need to make and the multiple details that still seem to need more clarity. Although the GST Council has opened multiple online and offline channels to clarify queries, the day-to-day operational challenges of the post-GST era will unfold only in the coming months. Considering the extent of changes required to make your organization GST compliant, the question you need to ask yourself is “Is my organization GST ready?” Is your organization’s information system such as HIS, HMS, LIS, and CIS GST compliant and ready? Have you?revisited your invoicing and other accounting processes, tax structure, agreements, vendor and other business contracts, and pricing strategies? Have you missed any detail in your GST transition requirements? Are your staff trained enough to handle the post-GST transactions without disturbing your customers? Is your vendor, supplier and partner ecosystem equally ready? GST CHECKPOINTS The answers to most of these queries are with your healthcare technology and information system providers. Hence, before making the change, during the transition, and after you begin your post-GST journey, assess your technology partner’s capabilities by answering the following questions: Does your technology provider have a team of experts – from chartered accountants to technology professionals – who will review your entire F&A system to design, develop, test, and implement GST-specific changes? Is your existing software scalable enough to incorporate GST-related upgrades and releases? Is the transition looking way too expensive for you – are there better alternatives? Do you think it is a better option to transition completely into a new system since your legacy, best-of-breed software has been stitched together for far too long? Is your updated system audit-ready? Does the software provider have the capabilities of delivering GST-related training and support to your staff? A technology partner that delivers on all the above expectations is indeed your ideal GST-friendly decision. CONCLUSION The post-GST era has arrived and we really do not want to be caught napping. You need to complete your transition right away and make sure that you are completely ready as an organization to meet the new needs of the new financial regime. What you need is an end-to-end solution that is future ready, not only from a GST point of view but also in terms of delivering a technology-driven solution that brings together IoT, artificial intelligence, data-driven insights, real-time visibility, and easy access to care. If your organization has a comprehensive ERP solution with an in-built global taxation solution, then transitioning into the post-GST era will be quite an easy task- from input tax credit reconciliation to filing returns. But for the others, ensure that your healthcare information provider should be able to deliver to you the complete package GST-compliant solution that integrates seamlessly with your organization’s ERP system. The transition is certainly inevitable, but with the support of a strong technology partner, your healthcare organization has no reason to be worried. So, are you GST ready? Author email@example.com
Is Your Healthcare Organization GST Ready?
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