Business Economy

Tax Exemption Of Covid Related Goods

Finance Minister Nirmala Sitharaman will chair the 44th meeting of the Goods and Services Tax (GST) Council today which is expected to take a decision on relief in respect of COVID-19 related items.

New Delhi: Union Minister Nirmala Sitharaman will chair the 44th GST Council meeting via video conferencing at 11 am in New Delhi today, informed the Finance Ministry on Friday. The meeting will be attended by MoS Finance Anurag Thakur besides Finance Ministers of States and Union Territories and senior officers from central and state governments.

The meeting is being held 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.

At its meeting on May 28, the GST Council had recommended full exemption from IGST on a number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators, and other oxygen storage and transportation equipment, certain diagnostic markers test kits, and COVID-19 vaccines even if imported on payment basis for donating to the government or on the recommendation of state authority to any relief agency. The exemption is valid up to August 31 this year.

Though 5% GST is levied on vaccines and cotton masks, 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.

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