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GST rate cut period should extendbeyond September 30, say experts

Our Bureau New Delhi, June 12 New Delhi | Updated on June 12, 2021

Finance Minister, Nirmala Sitharaman addressing a press conference after the GST Council meeting in New Delhi, on Saturday   -  KAMAL NARANG

‘Curtailment of benefit period will make investment planning, supply chain expansion difficult’

The latest decision of the GST Council has brought some ray of hope for those in need of treatment for Covid. While drug manufacturers believe that prices of life-saving drugs being used in Covid treatment will be cheaper following the Council’s decision to cut levy, tax experts feel the rate cut should be extended beyond September 30.

Mahesh H Doshi, National President of Indian Drug Manufacturers' Association, welcomed the decision of the Council to reduce the GST on a few drugs used for Covid-19 treatment. “At the end of the day, consumers are going to benefit from this decision. These life-saving drugs are going to be cheaper for them,” he said.

Reduced cost burden

Sanjay Bhutani, Director with Medical Technology Association of India (MTaI), also feels lowering of levies will ensure reduced cost burden for the patients. “Though we hoped that Covid related items would be zero-rated, the reduction of the rates should provide some relief to the importers and domestic manufacturers. Since the validity of reduced rates is till September, we hope that this will give us adequate time to prepare for the third wave, if it comes,” he said.

The lower rates are available till September 30. M.S Mani, Senior Director with Deloitte India, said that while the reductions on medication and equipment are good welfare measures, curtailment of the exemption period would make it difficult for businesses to plan new investments and expand their supply chains to ensure that they reach all corners of the country. “Businesses engaged in their manufacture and trading would hope that the period is extended beyond September 30,” he said.

Hoping the same, Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co., said that the GST rate cut on Covid related items is a step in the right direction. It is likely that the situation will be reviewed around September and if required, the rate cut will be extended for a further period.

Industry chamber PHDCCI said that calibrated reduction in the rates of GST on Remdesivir, ventilators, medical-grade oxygen, Covid-19 testing kits, oxygen concentrators and BiPAP machine and no GST on Tocilizumab will go a long way in treating Covid cases.

Published on June 12, 2021

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