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Saturday, June 12, 2021

GoM report, rate cut for Covid essentials on GST Council table

The Council will take a final decision regarding the report submitted by a Group of Ministers (GoM) to decide on a GST rate cut for Covid vaccines, relief materials and medicine for black fungus.

By: ENS Economic Bureau | New Delhi |
June 11, 2021 3:00:11 am

After consensus eluded the decision regarding reducing taxes on Covid-related relief materials in the 43rd Goods and Services Tax (GST) Council meeting, the next one is now slated to be held on Saturday.

The Council will take a final decision regarding the report submitted by a Group of Ministers (GoM) to decide on a GST rate cut for Covid vaccines, relief materials and medicine for black fungus.

In the previous meeting on May 28, the Council, a GoM was set up to recommend tax relief on Covid essentials, including PPE kits, masks and vaccines, to the GST Council. The GoM, headed by Meghalaya Chief Minister Conrad Sangma, submitted its report on June 7.

The GoM is learnt to have supported a rate cut on some Covid essentials to 5 per cent and no change in tax rate on vaccines. Uttar Pradesh Finance Minister Suresh Kumar Khanna, who is also a member of the GoM, on Wednesday said the state is in favour of cutting taxes on Covid essentials to facilitate patients, but will accept the decision of the GST Council on tax rates.

The GoM on GST concessions on Covid relief items was mandated to examine whether a GST rate cut or exemption is required for medical-grade oxygen, pulse oximeters, hand sanitizers, oxygen therapy equipment like concentrators, ventilators, PPE kits, N-95 and surgical masks and temperature checking equipment. It also looked into Covid vaccines, drugs, and medicines for Covid treatment and testing kits for Covid detection.

Currently, 5 per cent GST is levied on domestically manufactured vaccines, while it is 12 per cent for Covid drugs and oxygen concentrators.

The states and Centre had differing views on the reduction in tax rates for these items in the 43rd GST Council meeting held on May 28. However, GST was exempted on import of Amphotericin B — a medicine used for treatment of black fungus.

Congress and other Opposition ruled states have been demanding a reduction in taxes and zero rating for these items but the central government felt the move may not result in the benefits being passed on to the end users of patients and citizens.

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