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Covid drugs, tools get cheaper, GST Council decides to maintain status quo on vaccine tax

No GST on black fungus medicine, rates cut for ventilators, sanitisers, test kits, ambulances

Published: 13th June 2021 07:39 AM  |   Last Updated: 13th June 2021 07:39 AM   |  A+A-

Finance Minister Nirmala Sitharaman addresses the media after chairing 44th GST Council meeting via video conferencing in New Delhi on Saturday | Shekhar Yadav

NEW DELHI:  The GST Council on Saturday decided to maintain status quo on tax on Covid-19 vaccines, which will continue to be taxed at 5 per cent. However, the Council, which met via video-conferencing to discuss the recommendation by the Group of Ministers (GoM) on essential Covid supplies, slashed rates on medical grade oxygen, Covid testing kits, hand sanitiser and other items used in Covid-19 relief and management till September 30.

“Five per cent GST on vaccines continues. The Centre will buy 75 per cent of vaccines as announced earlier and will also pay its GST. However, 70 per cent of income from GST will be shared with states,” Finance Minister Nirmala Sitharaman told media after the GST Council meet.

The FM explained that the existing 5 per cent GST on vaccines will not be a burden on users as the Centre is paying for 75 per cent of the vaccines which are given to citizens free of cost. However, those who go to private hospitals for vaccination will have to bear the cost of GST. The Council also removed the 5 per cent tax on black fungus medicine Amphotericin B. Also, the rate on Covid drug Remdesivir has been lowered from 12 per cent to 5 per cent. The Council said more medicine will be added if it is recommended by the health department.

However, the Council decided against cutting tax on RT-PCR machines, RNA extraction machines, and genome sequencing machines. These items currently attract 18 per cent GST. In the last GST Council meeting the finance minister announced a GoM headed by Meghalaya Deputy CM Conrad Sangma to examine whether any GST concessions or exemptions should be given on Covid-relief items.

The GoM gave its recommendations on Tuesday and after that a single agenda meeting was called.
However, finance ministers from states ruled by the Congress party expressed disapproval on not providing zero-rate on Covid relief items and they walked out before the meeting concluded.



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