Amid the ongoing second wave and the possibility of the third wave of COVID 19 pandemic, the GST Council at its 44th meeting on Saturday has announced tax cuts on medicines, some hospital equipment and other related items based on the recommendations of a Group of Ministers (GoM). Medicines like the monoclonal antibody Tocilizumab and Amphotericin B, used for treating Black Fungus or mucormycosis, have been exempted from GST. The rate on Remdesivir has been lowered to 5% from 12%.
A group of ministers, headed by Meghalaya Deputy Chief Minister Conrad Sangma, was formed after the GST Council's last meeting to examine whether any GST concessions or exemptions should be given on COVID-19 relief items.
Finance Minister Nirmala Sitharaman announced that GST has been slashed from 12 per cent to 5 per cent for oximeters, medical grade oxygen, oxygen concentrator and generator including personal import, ventilator, ventilator masks, Bipap machine and high-flow nasal cannula device.
Also, the GST rates on ambulances have been reduced from 28 per cent to 12 per cent. The tax cuts will be valid till September 30 and it may be extended nearer the deadline.
However, COVID-19 vaccines will continue to be charged a GST of 5 percent. As per the Prime Minister Narendra Modi’s recent announcement the Centre is paying for 75% of the vaccines and all citizens can avail those free vaccines. "Five percent GST on vaccines continues. The Centre will buy 75 percent of vaccines as announced earlier and will also pay its GST. However, 70 percent of income from GST will be shared with states," she added.
Sitharaman said GST will have to be paid by those who go to private hospitals for vaccination.
Moreover, the Council has not made any change in the GST rate of some items being charged at 18 percent such as RT-PCR machines, RNA extraction machines and genome sequencing machines. Genome sequencing kits that are being charged at 12 per cent will continue to be charged at the same rate. There is also no tax cut on raw material for COVID 19 testing kits.
According to Sitharaman, the GST on electric furnaces and temperature checking equipment was brought down to 5 per cent and on ambulances to 12 percent.
Maharashtra Deputy Chief Minister Ajit Pawar, who was part of the GoM, has welcomed the GST Council’s decision on waiver and reduction in rates.
However, finance ministers of the Congress ruled a staged walkout. Finance Ministers of Punjab and Chhattisgarh cited that GST Council did not consider demand from some opposition states for zero rate on COVID 19 relief items.
Punjab Finance Minister Manpreet Singh Badal in a tweet said, ‘’Once in a Century Crisis, the GST Council’s GoM should stop acting like a Shahenshah. COVID 19 GST should be zero rated, don’t end exemptions in August. Attempts to pick and choose exemptions on the grounds of inverted duty structure or cheaper imports would destroy the foundation of GST.’’
On the other hand, Chhattisgarh Finance Minister TS Deo said the GST Council did not take issues relating to compensation period extension, and raising of borrowing limits raised by the opposition states.
Meanwhile, the PHD chamber has welcomed the calibrated reduction in the rates of GST on Remdesivir, ventilators, medical grade oxygen, COVID-19 testing kits, oxygen concentrators and BiPAP machine from 12 % to 5%, and no GST on Tocilizumab. ‘’This will go a long way in treating COVID 19 cases and to provide required relief for treatment of infections. No tax on Amphotericin B, the antifungal drug used for black fungus treatment, is a significant step to reduce the burden on black fungus patients,’’ it said.