.jpg "nirmala (2)")
The Goods and Services Tax (GST) council meeting on Saturday accepted the group of ministers (GoM) recommendation to slash tax on Covid goods. This includes various items ranging from medicines, oxygen, testing kits and other Covid-related materials.
While GST on the black fungus medicine Amphotericin B has been slashed to zero along with Tocilizumab injections used in Covid-19 treatment, the rate on Remdesivir has been cut from 12 per cent to 5 per cent.
However, the vaccine GST rate will remain at 5 per cent contrary to earlier demands from states to bring it down to zero. The issue anyway seems to have toned down since PM Modi’s announcement that the Centre would be procuring all the vaccines. “Approximately Rs 71 out of every Rs 100 collected (in GST on vaccines) will be shared with the states,” Finance Minister Nirmala Sitharaman said after the meeting.
“The council largely agreed to go with the GoM’s recommendations. In none of them has GoM recommended an increase in rates (sic),” Sitharaman added. In fact, GoM suggestions for the likes of furnaces (GoM suggested 10 per cent, council brought it down to 5 per cent), ambulances (28 per cent to 12 per cent) were further reduced.
The new rates will be applicable immediately.
also read
- Highest-ever GST collections reported in April; breaches Rs 2 lakh crore mark
- GST collections hit Rs 1.78 lakh crore in March, second highest since roll-out
- GST enforcement body begins action against FMCG majors like ITC, Pepsico and others for tax evasion
- GST collections rise to second highest-ever at Rs 1.72 lakh crore in January
The new slab will be applicable till September 30. The GoM recommendation was until August 31, but in the council, it was decided to extend it by a month. Further extensions will be decided later.
Saturday's meeting follows the council's marathon session two weeks ago, where Sitharaman failed to wring out a solution to the fervent demand of many states, particularly the opposition-ruled ones, over bringing down GST on Covid-related products. The May 28 meeting entrusted the GoM to look overall into the tax structure for Covid-related items, especially the demand for slashing taxes to zero on Covid vaccines, as well as medicines used for the pandemic and some of its lethal offshoots like black fungus.
The GoM submitted its report last Sunday, ahead of schedule. Interestingly, it supported the Centre's formula of keeping vaccines in the lowest 5 per cent vaccine slab.
