Comments
Shishir Sinha The GST Council will meet on Saturday, June 12, to consider taxation of Covid relief materials including vaccines.
Meanwhile, the Opposition-ruled States are likely to continue raising their demand for exemption/concession on Covid relief materials including vaccine even as States have not to buy vaccine.
According to officials, the meeting has just one agenda: to discuss recommendations of Group of Ministers (GoM).
The Council, in its May 28 meeting, decided to set up GoM to go into the need for concession/exemptions from GST on Covid-19 related individual items. The GoM submitted its report last week.
Although recommendations of the GoM have not been made public, an official said the GoM did not recommend any change in the GST rate on vaccines.
5% on medical oxygen
“Change in GST rate on vaccine will have no visible impact on demand or supply or the end consumer. In fact, an exemption or a levy of 0.1 per cent rate would only affect the domestic manufacturers,” he explained. Vaccines now attract GST of 5 per cent. As cost of medicines is borne mainly by the patients, an official said, GoM recommended a combination of exemption and reduction on various medicines.
On other individual products, the GoM favours reduction in GST rates to 5 per cent from 12 per cent on medical grade oxygen, oxygen concentrators and pulse oximetres for a limited period. It also suggested reduction in rates on hand sanitizers and temperature check equipment. However, it did not recommend change in rates on PPE kits or N95 masks.
With the Centre coming out with the new vaccine policy, States do not have to bear the burden of tax, tax on the jabs. MS Mani, Senior Director with Deloitte India, said: “The GST paid by manufacturers on vaccines supplied to the Government would in any case accrue to the Government; hence, on a broader basis, it would not be appropriate to consider the same as a cost to the Government.”
Kapil Rana, Founder & Chairman of HostBooks Limited, said the new vaccine policy will save lot of funds for the States as they were procurring the jabs and providing them free-of-cost to the people.
However, “private hospitals will continue to procure vaccines at 5 per cent GST. Government also fixed the vaccines prices and service charges in the new policy,” he said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.