GST council cuts tax on Covid essentials

NEW DELHI: The Goods and Services Tax (GST) Council on Saturday temporarily removed GST on two medicines, slashed tax rates on 15 other items such as drugs, medical grade oxygen and testing kits to 5%, and reduced the levy on ambulances to 12% for little over three-and-a-half months in order to provide relief to people fighting the second wave of Covid-19 pandemic.

While GST on Amphotericin B and Tocilizumab has been slashed from 5% to zero, taxes on Remdesivir and anti-coagulants like Heparin have been reduced from 12% to 5%. A flat GST rate of 5% is kept for all such drugs that would be recommended by the ministry of health and family welfare (MOHFW) and the department of pharmaceuticals (DOP) for Covid treatment.

After the 44the meeting of the council, its chairperson and Union finance minister Nirmala Sitharaman said the levy of 5%

GST on Covid-19 vaccines would continue as 75% vaccines are available to people free of cost in government hospitals even as the tax burden would be borne by the central government.

“These rates will be valid till September as against Augustend [that was] recommended by the GOM,” she said. According to the Union finance minister, the GST Council would review the situation later and take a decision on extending the exemption period further. GST Council is chaired by Sitharaman and finance ministers of states are its members.

The 43rd meeting of the council on May 28 had decided to form a group of ministers (GOM) to consider tax-waivers on individual Covid-19 essentials such as vaccines, testing kits, drugs, medical oxygen, oxygen concentrators, ventilators, alcoholbased sanitizer and hand wash. A day later, Sitharaman constituted an eight-member ministerial panel under the convenership of Meghalaya chief minister Conrad K Sangma, which submitted its recommendations to the council on June 6.

In order to bring down costs on oxygen, oxygen generation equipment and related medical devices, the council reduced GST on these items from 12% to 5%. They are medical grade oxygen, oxygen concentrator, oxygen generator (including personal imports), ventilators, ventilator masks, canula and helmet, BIPAP machine and high flow nasal canula (HFNC) device.

GST rates on Covid testing kits and specified inflammatory diagnostic kits -- D-dimer, IL-6, Ferritin and LDH – have also been brought down from 12% to 5%.

Other Covid-19 related relief materials have been also made