GST Council to consider tax cuts for Covid-19 products
The Goods and Services Tax (GST) Council is said to meet on Saturday to contemplate a proposal by a group of ministers (GOM) to reduce taxes on most Covid-19 medicines and materials to give relief to the people, a government source said.
The GOM, led by Meghalaya chief minister Conrad Sangma, has suggested a 5% reduction of the GST rate for most of the Covid medicines and materials except vaccines to the GST Council. The finance minister of Uttar Pradesh Mr Suresh Kumar Khanna who is also a member of the GOM said that his state government was also in favour of a reduction in GST rates on Covid-19 medicines and essentials supplies.
Currently, the GST rates for oxygen concentrators, medical oxygen, pulse oximeters, Covid testing kits and for many of the covid medicines including Remdesivir, Doxycycline, Ivermectin, Faviflu and Tocilizumab are at 12%. GST is 18% for RT-PCR machines, protective equipment, digital thermometers, laboratory sanitisers/disinfectants, paper bed sheets and road transport tanks. The GST rate is 5% on N95 masks/surgical masks.
The finance minister of Punjab, Manpreet Singh Badal stated that “Many goods suffer basic customs duty ranging up to 20% and I-GST up to 18% besides a social welfare surcharge at 10%. As IGST is charged on the taxable value that includes import duties,
the effective burden exceeds by another 2-3%,” in an official letter to the union finance minister Nirmala Sitharaman prior to the GST council meeting to be held on 28th of May. Backing Badal’s view, West Bengal finance minister Amit Mitra had written to the Union finance minister for zero-rated tax on Covid related things at least for a fixed period of time or taxing them minimally to avoid any implementation obstacles.