Economy

GoM on taxability of Covid relief materials submitted report to FM

Our Bureau New Delhi | Updated on June 07, 2021

GST Council likely to meet soon

A Group of Ministers of State Finance Ministers, constituted by the GST Council, has submitted its report on recommendations related with exemption/concession from GST on Covid-related individual items.

Although recommendations of the GoM headed by Chief Minister of Meghalaya Conard Sangma was not been made public, it is believed to have referred back taxation issue on vaccine to the Council. The Council is expected to meet soon.

As on date, vaccine attracts GST at the rate of 5 per cent. The Centre has always maintained that exempting the vaccine from GST will hurt the end users as manufacturers will not get input tax credit and thus pass on the higher cost to the end consumer. Even GST Council’s panel, Fitment Committee was not in favour of exempting the vaccine. However, all Opposition-ruled States are pressing for exemption not just for vaccines but also for all other Covid relief materials including mask, sanitiser, oxygen concentrators beside others individual items.

Considering the difference of opinion, GST Council in its meeting on May 28 decided to set up a GoM with a deadline of June 8 to submit the report. The group comprised of Deputy Chief Minister of Gujarat Nitin Patel, Deputy Chief Minister of Maharashtra Ajit Pawar, Transport Minister of Goa Maubin Godinho, Finance Minister of Kerala K N Balagopal, Finance Minister of Odisha Niranjan Pujari, Finance Minister of Telangana T Harish Rao and Finance Ministry of Uttar Prades Suresh K Khanna as Members. The group met on June 3.

The GoM is believed to have recommend exemption for drugs to treat black fungus while uniform duty of 5 per cent for other relief materials including oxygen concentrators, PPE kits. As on date these products carry rates ranging 5-18 per cent while ambulance has a GST rate of 28 per cent.

Published on June 07, 2021

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