GST Council meet today; tax cut on Covid essentials, black fungus drug on agenda
The GST Council meeting, to be chaired by Union finance minister Nirmala Sitharaman, will be held on Saturday to decide on Goods and Services Tax rate cut on medical supplies for Covid management and black fungus medicine. The GST Council is expected to consider the recommendations of a group of ministers (GoM) set up to look into demands for tax relief on medical supplies to treat the coronavirus disease or Covid-19.
The GoM was set up to recommend Goods and Services Tax (GST) exemptions on a range of Covid-19 essentials, including vaccines, drugs, testing kits and ventilators, in the previous meeting of the council on May 28. The GoM submitted its report on June 7 and it will be discussed in Saturday’s meeting.
The virtual GST Council meeting will be attended by the Union minister of state for finance Anurag Thakur as well as finance ministers of states and Union territories and senior government officers.
Uttar Pradesh finance minister Suresh Kumar Khanna, who is also a member of the GoM, said on Wednesday said that the state is in favour of cutting taxes on Covid-19 essentials to facilitate patients but will accept the decision of the GST Council on tax rates.
The GoM, according to its terms of reference, was to examine “the need for GST concession/exemption” on Covid vaccines, drugs and medicines for Covid-19 treatment, testing kits for Covid detection, medical grade oxygen, pulse oximeters, hand sanitisers, oxygen therapy instruments (concentrators, generators and ventilators), PPE kits, N95 masks, surgical masks, thermometers and any other items required for relief.
While vaccines and cotton masks attract 5% GST, most of these items fall in the 12% tax slab. Testing kits, drugs, medical oxygen, oxygen concentrators and ventilators fall under the 12% tax bracket. Alcohol-based sanitisers, hand wash gels, disinfectants and thermometers attract 18% GST.
The group of ministers was constituted after several member states of the council, such as West Bengal and Punjab asked for exempting GST on all Covid-essential materials. During the GST Council meeting on May 28, the body left taxes on Covid-19 vaccines and medical supplies unchanged after the Bharatiya Janata Party (BJP) and opposition-ruled states sparred over whether the tax cut benefits will reach the common man. However, GST was exempted on the import of Amphotericin B—a medicine used for the treatment of black fungus.