TN reiterates demand for 0% GST on Covid drugs

PTR in his maiden speech at the 43rd GST Council meeting chaired by Union FinMin Nirmala Sitharaman, gave a detailed account on the shortcomings in the GST Council.

Published: 29th May 2021 05:03 AM  |   Last Updated: 29th May 2021 05:03 AM   |  A+A-

Tamil Nadu minister PTR Palanivel Thiagarajan

Tamil Nadu minister PTR Palanivel Thiagarajan

By Express News Service

CHENNAI: Finance Minister Palanivel Thiaga Rajan on Friday reiterated the demand of Tamil Nadu government for levying zero-rating GST for essential Corona medicines at least for a temporary period since this would ensure the cost of the medicines without the suppliers having to absorb any reversal of input tax credit. 

The Minister, in his maiden speech at the 43rd GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman, gave a detailed account on the shortcomings in the GST Council and the financial policies of the Central government that have been affecting the Tamil Nadu government.  

“Containing the Covid-19 pandemic is currently the highest priority task for both the Central government and State governments in India.  Covid-19 vaccines by the State government and  purchase of medicines including Remdesivir and Tocilizumab are the primary purchases,” the Minister said and explained a zero rating GST on these would be helpful to the States. 

Stating that Chief Minister MK Stalin has already written to the Prime Minister on this issue and accordingly a decision can be taken on zero rating GST on such essential items, Rajan said, “There are certain legal issues in enabling such zero rating.  But these legal issues can be overcome through necessary legislation or by promulgating an ordinance once we reach a consensus,” he pointed out. 

Thiagarajan also pointed out that this year, considering the present Covid situation, Tamil Nadu may not expect any more than a marginal growth at the best and a significant negative growth at the worst. The expectations in other states would be similar. 

“Keeping this in mind, I call upon this Council to consider making arrangements for fully compensating the States for the gap arising in the year 2021-22 between the protected revenue and the actual expected revenue, either by means of bridge funding by the GoI or by its open market debt arrangement. Considering the long-term effects of the pandemic, it would also be appropriate to extend the compensation arrangement beyond July 1, 2022,” he said. 


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