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HomeFact CheckFact Check: Did Govt Propose A 5% Service Tax On Healthcare? Here’s...

Fact Check: Did Govt Propose A 5% Service Tax On Healthcare? Here’s The Truth Behind Viral Letter

Authors

Vasudha noticed the growing problem of mis/disinformation online after studying New Media at ACJ in Chennai and became interested in separating facts from fiction. She is interested in learning how global issues affect individuals on a micro level. Before joining Newschecker’s English team, she was working with Latestly.

An open letter to the “Aam Aadmi” attributed to Dr Devi Shetty, founder of Narayana Health, informing about the proposal of “5% service tax on healthcare in the recent budget” is going viral on social media platforms. The letter further encourages the people to observe March 12 as “Misery Day,” and gather around Governors’ homes demanding a roll back of the proposed “Misery Tax.” Newschecker found that though the letter was written by Dr Shetty, it dates back to March 2011 and is being shared out of context.

In a tweet, dated February 25, 2023, TMC leader Jawahar Sircar shared the viral image and stated, “Agree fully with Dr Devi Shetty that Modi-Nirmala’s service tax on health services will devastate the middle class and poor. Withdraw this tax!” The tweet has since been deleted. An archived version of the same can be seen here.

Several other Twitter users, including the official account of the  Congress Seva Dal Karnataka, also shared the viral open letter, demanding the Modi-led government to withdraw the tax.

Archived versions of such tweets can be seen here, here, herehere, here and here.

Newschecker also received the viral image on our WhatsApp tipline (+91-9999499044 ) requesting to be fact checked.

Also Read: Central Govt Imposed 18% GST On Crematorium Services?

Fact Check/Verification

On analysing the viral letter, we spotted the letter-writer mentioning the service tax which was replaced by the GST in 2017. The letter further called for observance of “Misery Day” on March 12, which it added was a Saturday. However, March 12, 2023 is actually a Sunday.

Following this, we looked up keywords “Devi Shetty,” “5% healthcare” & “open letter” on Google which led us to a report by Money Control, dated March 10, 2011. The report stated, “Renowned cardiologist Devi Shetty has met Finance Minister Pranab Mukherjee to seek withdrawal of 5% tax on health care services provided by centrally air-conditioned hospitals, according to sources…The renowned doctor had earlier described the proposal to impose service tax on health care as a “misery tax”. “This is not ‘Service Tax’, it is a ‘Misery Tax’ since the government wants to make money out of your misery”, he had said in an open letter posted on the website of the Narayana Hrudayalaya. Mukherjee in the Union Budget for 2011-12 had proposed to impose an effective service tax of five per cent on all services…”

Service Tax On Healthcare
Screengrab from Money Control website

A keyword search for “Misery Day,” “Service Tax,” “Devi Shetty,” & “ Budget 2011” on Google yielded multiple reports from March  2011 on criticism by the medical fraternity over the then-Union Finance Minister’s proposal to levy 5% service tax on health care, and Shetty’s open letter against it.

One such report published in Mid-Day, dated March 13, 2011, stated, “The healthcare industry continued to react strongly to the proposed service tax hike in the budget with Devi Shetty, one of the country’s renowned heart surgeons, writing an open letter calling the levy “unfortunate” and seeking observance of March 12 as ‘Misery Day’ to protest it.

Screengrab from Mid-Day website

Other such reports can be seen here, here, here , here and here.

Notably, then-Finance Minister Pranab Mukherjee had withdrawn the proposal to levy 5% service tax on health care following widespread criticism.

Further, in a tweet dated February 26, 2023, Government’s PIB Fact Check also clarified the viral open-letter by Devi Shetty is “from year 2011 and is being shared out of context.”

Screengrab from tweet by PIB Fact Check

We also came across a few tweets from March 2011, carrying a link to a copy of the viral letter.

Old Claim Revived

The same letter had gone viral in 2017, prompting the social media users to take a dig at the Modi-led government in the centre for allegedly proposing to impose a 5% service tax on healthcare.

Screengrab from tweet by @singh_biswajeet

Archived versions of the tweets can be seen here and here.

The Finance Ministry had back then also clarified, “The Central Government has clarified that there is NO proposal in the Union Budget 2017-18 to levy 5% Service Tax on Healthcare Services, as reported in certain Social Media circles.

Conclusion

We could hence conclude that an open letter by Dr Devi Shetty calling out the proposal to levy 5% service tax on healthcare dates back to 2011, when Pranab Mukherjee, then Finance Minister in the UPA government- had suggested the same. The proposal was however rolled back after widespread criticism.

Result: Missing Context

Sources

Report By Money Control, Dated March 10, 2011
Report Published In Mid-Day, Dated March 13, 2011


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Authors

Vasudha noticed the growing problem of mis/disinformation online after studying New Media at ACJ in Chennai and became interested in separating facts from fiction. She is interested in learning how global issues affect individuals on a micro level. Before joining Newschecker’s English team, she was working with Latestly.

Vasudha Beri
Vasudha Beri
Vasudha noticed the growing problem of mis/disinformation online after studying New Media at ACJ in Chennai and became interested in separating facts from fiction. She is interested in learning how global issues affect individuals on a micro level. Before joining Newschecker’s English team, she was working with Latestly.

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