West Bengal chief minister Mamata Banerjee standing beside a mirror singing along with others during an event to mark the birth anniversary of Nobel Laureate Rabindranath Tagore at Rabindra Sadan in Kolkata on Sunday. (PTI PHOTO.)
West Bengal chief minister Mamata Banerjee standing beside a mirror singing along with others during an event to mark the birth anniversary of Nobel Laureate Rabindranath Tagore at Rabindra Sadan in Kolkata on Sunday. (PTI PHOTO.)

CM Mamata seeks GST waiver on Covid-19 equipment, already done tweets Sitharaman

Banerjee had written to Prime Minister Modi on Sunday that a large number of organisations, individuals and benevolent agencies were ready to donate oxygen concentrators, cylinders, cryogenic storage tanks, and Covid-19 related drugs but had approached the state government seeking exemption from customs duty and GST.
PUBLISHED ON MAY 09, 2021 09:11 PM IST

With coronavirus infections in Bengal continuing to surge on Sunday, Union finance minister Nirmala Sitharaman told chief minister Mamata Banerjee through 16 tweets that the goods and services tax (GST) exemption the CM sought on donated medical equipment and medicines already exists.

Banerjee wrote to Prime Minister Narendra Modi on Sunday that “a large number of organisations, individuals and benevolent agencies” were ready to donate oxygen concentrators, cylinders, cryogenic storage tanks, tankers, tank containers and Covid-19 related drugs but have approached the state government seeking exemption from customs duty and GST on these items.

Responding to this, Sitharaman took to Twitter on Sunday afternoon.

“A list of items for Covid-19 relief granted exemption from IGST for imports was issued on 3rd May’21. These were given exemption from Customs Duty/health cess even earlier. Hon. CM @MamataOfficial may notice that items in your list are covered,” the finance minister wrote.

“Full exemption from Customs duties, including IGST, is already available to ALL COVID-19 relief material (not confined to a list) imported by @IndianRedCross for free distribution in the country. With effect from 3 May, 2021, full exemption from all duties has been provided to Remdesivir injections, Remdesivir API, and for a chemical for the manufacture of this drug. Also to Medical Oxygen, equipment used for the manufacture, storage and transportation of oxygen, equipment used for providing oxygen therapy to Covid-19 patients such as Oxygen Concentrators, ventilators, non-invasive oxygen masks etc. Also to Inflammatory diagnostic kits and reagents for Covid-19 testing and Covid-19 vaccines. ” Sitharaman wrote in subsequent tweets.

“This exemption applies to all above mentioned goods when imported free of cost for free distribution in the country by any entity, state govt, relief agency or autonomous body on the basis of a certificate issued by a state government. In order to augment the availability of these items, government has also provided full exemption from basic customs duty and health cess to their commercial imports,” Sitharaman tweeted.

She pointed out that GST applies to domestic supplies and commercial imports.

“GST at rates varying from 5% (on vaccines), 12% (COVID drugs, oxygen concentrators) is applicable to domestic supplies and commercial import of these items. If IGST 100 is collected on an item, 50 accrues to the Centre and the States each as CGST and SGST respectively. Further 41% of the CGST revenue is devolved to states. So out of a collection of 100, as much as 70.50 is the states’ share,” she wrote.

“If full exemption from GST were given, the domestic producers of these items would be unable to offset taxes paid on their inputs and input services and would pass these on to the end consumers by increasing their price. Covid-19 vaccines are being provided free of cost by the GoI to those who are 45 years of age & above and to all frontline workers. On government supplies, GST is also paid by the government. From the GST collected on vaccine, half is earned by the Centre and the other half by the states. Further, 41% of Centre’s collections also get devolved to the states,” the tweets said.

“So states end up receiving almost 70% of the total revenue collected from vaccines. In fact, a nominal 5% GST is in the interest of the domestic manufacturer of vaccine and in the interest of the citizens. If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price. A 5% GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund. Hence exemption to vaccine from GST would be counterproductive without benefiting the consumer,” Sitharaman wrote.

As Bengal recorded 19,441 new cases and 124 deaths on Sunday, the 160th birth anniversary of Rabindranath Tagore was observed in Bengal on Sunday without any celebration, the traditional live performances and mass gathering.

PM Modi paid homage to the bard by writing tweets in Bengali and English.

“On Tagore Jayanti, I bow to the great Gurudev Tagore. May his exemplary ideals keep giving us strength and inspiration to build the India he dreamt of,” wrote the Prime Minister.

Banerjee held a brief official event at Rabindra Sadan in Kolkata where Tagore’s photograph was garlanded. The chief minister joined some of her ministers who sang a couple of songs Tagore composed.

Brief events were held at Visva Bharati University that Tagore founded in Birbhum district, his ancestral house at Jorasanko in north Kolkata and at Rabindra Bharati University.

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