NEW DELHI: There will be no immediate relief on GST over COVID-19 vaccine and medical supplies as the GST Council on Friday left taxes on these unchanged, though it decided to extend duty exemption on import of a medicine used for treatment of black fungus.
The Council formed a Group of Ministers (GoM) to decide if any further exemption is required. "The GoM will submit its report on or before June 8. Any new rates will now be decided by the GoM," FM Nirmala Sitharaman said.
Currently, vaccines attract 5 per cent GST. "The consensus was that before agreeing to fitment committee, a GoM should study if zero rated tax can be levied or formal tax of 0.1 per cent," said sources.
Chhattisgarh commercial tax minister TS Singhdeo said the argument that Input tax credit can be claimed only on those zero-rated goods which are imported or from SEZ is wrong. "This is limited to IGST not CGST. Section 9, 17 and section 52 of the CGST Act say that there is a provision of zero rated tax," he said.
While there will be no immediate relief on GST over various medical surprises, a number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines, will be exempted from IGST.
"The Council has decided to exempt the import of relief items even if they are purchased. If these are meant for donating to the government or on recommendation of the state authority to any relief agents. Also. This exemption has been extended till 31st August 2021," Sitharaman said.
Further, in view of rising black fungus cases, the above exemption from IGST has been extended to Amphotericin B.
COMPENSATION
The Centre will use the same formula of back-to-back borrowing for GST compensation for this year,
estimated at Rs 1.58 lakh cr. Centre will call a special session to discuss extension of compensation period to states beyond 2022