PANDEMIC OR NOT, GST ON JAB STAYS

In these times of pandemic, when the government should be perceived as responsive and sensitive, Finance Minister Nirmala Sitharaman seems to be suggesting otherwise.

On Sunday, she virtually ruled out exempting Covid vaccines, medicines and oxygen concentrators from GST, saying such exemptions will make the lifesaving items costlier for consumers as manufacturers will not be able to offset the taxes paid on inputs.

Currently, domestic supplies and commercial imports of vaccines attract a 5 per cent Goods and Services Tax (GST), while COVID drugs and oxygen concentrators attract a 12 per cent levy.

The Finance Minister's response came after Mamata Banerjee wrote to PM Modi on Sunday asking that all life-saving drugs, equipment and instruments required to treat Covid-19 patients be exempted from GST.

It was Banerjee's third letter to PM Modi - since being sworn in for a third term on Wednesday. Incidentally, Congress working president Sonia Gandhi had also made a similar demand.

Mamata’s case is simple. Until now, the Centre was procuring the vaccine at a subsidised rate from the manufacturers. But now the states have been asked to purchase vaccines from their own resources to cover the 18 to 44 years age group. These purchases attract GST, making vaccines costly for the states. This needs to be exempted completely. It will reduce the cost for states and facilitate the drive towards universal vaccination. Mamata’s demand seems to have opened the floodgates: Sitharaman put out a barrage of tweets -- 16 of them in all – to argue why the needful can’t be done.

"If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price," Sitharaman argued.

She further tried to buttress her point by stating that it was a level playing field and the Centre and the states equally split the collections accruing from levy of Integrated GST (IGST).

Joining the chorus, TMC MP Mahua Moitra also put out tweets demanding that all vaccines be added to the list of items that are exempt from IGST.

Responding to Sitharaman's contention that full exemption from customs duties, including IGST, was already available to all Covid relief material imported by Indian Red Cross for free distribution in the country, Moitra said, "Why does everything have to go through the Red Cross of India. Why only IGST. Why can't citizens and hospitals buy even domestic goods without GST."

Moitra said duties may have been waived on Remdesivir injections, but Indians continue to pay Central-GST and StateGST on these lifesaving medicines.

"These should be waived." To the Finance Minister's submission that states get more than two-third of the taxes collected, the TMC MP said the Centre does not have a good track record of giving states their dues. Public health system in Bengal is buckling under the weight of surging infections and deaths. It is also reporting a shortage of hospital beds, medical oxygen, medicines and vaccines. Notably, even on Sunday, several hospitals were seen refusing patients in West Bengal as there was dearth of both beds and oxygen.

Meanwhile, the state government has initiated the ‘Oxygen on wheels’ to serve patients who were denied admission in hospitals. TMC leader Partha Chatterjee was seen inaugurating several oxygen parlours in South Kolkata’s Behala area.

In North Bengal, several autos were transformed into oxygen ambulances.With 124 deaths, West Bengal has recorded 19,441new cases in the last 24 hours.