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Odisha CM writes to finance minister seeking waiver of GST on Covid-19 vaccine purchase
Patnaik said that the states have been asked to purchase vaccines out of their own resources to cover the 18 to 45 years age group of the population.
Odisha chief minister Naveen Patnaik on Thursday requested the Central government to exempt Goods and Services Tax on purchase of Covid-19 vaccines while urging the Centre to share the additional resources raised through various cess and surcharges on petrol, diesel and liquor with the state, HT has learnt.
In a letter to Union finance minister Nirmala Sitharaman, Patnaik said that the states have been asked to purchase vaccines out of their own resources to cover the 18 to 45 years age group of the population. “These purchases attract 12 per cent GST making the vaccines costly for the states. Hence GST needs to be exempted completely,” Patnaik wrote.
Last month, Patnaik had announced that Odisha would give free Covid vaccines to 1.93 crore people in the 18-44 age group that would cost it around ₹2,000 crore. A finance department official said though the state would get half the amount of 12 per cent GST imposed on the vaccines, even that amount would burden the state exchequer in the pandemic year.
The chief minister has also sought financial assistance to states from cess and surcharges collected by the government of India.
Patnaik in his letter said it was important that the states are supported so that the entire country fights as one. “Lack of finances should not affect any state as it might affect the entire country in turn. Hence, the additional resources raised through various cess and surcharges on petrol, diesel, liquor etc which are exclusively available to the Union government may be suitably shared with state governments at this critical juncture.
“Sharing of financial assistance with states will strengthen the fight against the pandemic including the provision of vaccinations, free treatment, undertaking preventive measures and so on,” he wrote.
Odisha and several other states have been demanding that the Centre should share a part of the revenue it is earning from fuel via excise duty, cess and surcharge as the central devolution to states has gone down by 20 per cent. Last year, the Centre earned over ₹3 lakh crore through cess and surcharge on fuel. The central government in March told the Parliament that since May 2020, it has been earning ₹33 per litre of petrol and ₹32 on a litre of diesel in form of central excise duty, including basic excise duty, cess and surcharge.
