GST Council: Covid-19 vaccines to carry 5% tax rate, says finance minister
The Goods and Services Tax (GST) Council on Saturday agreed to stick to 5% tax rate on Covid-19 vaccines, announced finance minister Nirmala Sitharaman.
Among the significant tax reductions, the GST Council has cut tax rate from 12% to 5% on medical grade oxygen, oxygen concentrators, ventilators, BiPAP machines and high flow nasal cannula (HFNC) devices, finance minister Sitharaman announced.
GST rates slashed on various Covid-related items: Full list
Tax on Covid testing kits has been brought down to 5 per cent from 12 per cent, the council said.
Pulse oximeters, hand sanitisers, temperature check equipment and ambulances too will attract lower 5 per cent tax, the finance minister said.
The council has also approved rate reduction for Remdesivir from 12% to 5%; however, no tax will be charged on black fungus or mucormycosis medicines Tocilizumab and Amphotericin.
The new tax brackets were announced shortly after the finance minister chaired the 44th meeting of the GST Council aimed at providing tax relief on Covid-19 related individual items based on the report of the Group of Ministers.
The 44th council meeting was attended by Minister of State for Finance Anurag Thakur. The meet also saw finance ministers of states and Union territories and senior officers from Union government and states in attendance.
Ahead of the meeting, some state finance ministers in the GoM had pitched for a rate cut on Covid-19 essentials.
In the last GST council meeting held on May 28, taxes on Covid-19 vaccines and medical supplies were unchanged due to the widening rift between the BJP- and Opposition-ruled states questioning whether the tax cut benefits will reach the common man.
Also read: GST Council to weigh states’ fiscal woes
The Congress party- and other Opposition-ruled states have been demanding a reduction in taxes. However, the central government felt the move may not result in tangible gains for people.
As of now, 5% GST is levied on domestically manufactured vaccines, while 12% is charged on Covid-19 drugs and oxygen concentrators.