Finance Minister Nirmala Sitharaman chaired the 44th GST Council Meeting through a video conference on Saturday, June 12. At the press conference after the meeting, Sitharaman announced that the GoM’s recommendation on slashing rates on certain COVID-19 essentials have been accepted. The new rates will remain in effect till at least September 30, she said.
In its 44th meeting today, the GST Council announced tax cuts on a slew of items critical in the country’s fight against the raging coronavirus pandemic. The items include essential medicines, oxygen, oxygen generation equipment and related devices, and diagnostic and testing machine kits.
The GST rate cuts passed by the Council were suggested by a Group of Ministers (GoM), which was formed after the last GST Council meeting on May 28 to discuss possible reductions in COVID-related items.
Finance Minister Nirmala Sitharaman addressed the media following the GST Council Meeting and said that recommendations made by the GoM had been accepted.
Here are 4 key takeaways about decisions made by the GST Council Meet:
No GST on black fungus drug Amphotericin B, Tocilizumab
Speaking to the media, FM Nirmala Sitharaman announced that the Council had decided to waive off the GST levied on Amphotericin B, an antifungal drug used for the treatment of Black Fungus treatment. In addition to this, the finance minister also announced that there would be no tax on Tocilizumab, another key medicine that is increasingly being used for treating COVID-19 complications.
GST rates on COVID-19 Vaccines to stay
Finance Minister Nirmala Sitharaman said GST rates on vaccines are not going to be waived off. She defended the decision saying when the Centre is purchasing and paying GST too on Covid-19 vaccines and they are being given free of cost to the public, the GST rate will make no difference or impact on the people. She also informed that a major portion of GST collected on vaccines will be shared with states.
“Five per cent GST on vaccines will stay. The Centre will buy the 75 per cent vaccine as announced and will pay its GST too. But 70 per cent of income from GST will be shared with states,” said Nirmala Sitharaman.
Earlier, she had said that forgoing the GST would compel the manufacturers to raise the cost to offset the impact of taxes paid on inputs.
GST on ambulance brought down to 12%
Another key decision made in the 44th GST Council Meeting pertained to the GST levied on ambulances. Taking into cognisance that the second wave of COVID-19 compelled many patients to use the services of ambulances for being transported to hospitals, the GoM had suggested slashing down the GST rates on the services offered by the vehicles used to carry the sick and the injured people.
Heeding to the recommendation, FM Nirmala Sitharaman on Saturday announced that GST on ambulances has been lowered to 12 per cent. She said the rates will be valid till September as against August end as recommended by the GoM.
GST on remdesivir, ventilators, medical oxygen, COVID testing kits slashed to 5%
The GST tax rate on remdesivir, a key antiviral drug has been slashed down to 5 per cent, FM Nirmala Sitharaman announced following the Council Meet. In addition, the GST on hand sanitisers, pulse oximeters and temperature check equipment has been lowered to five per cent from 18 per cent at present, as per the press release issued by the Finance Ministry following the 44th GST Council meeting.
“The GST on anti-coagulants like Heparin, high flow nasal cannula (HFNC) device and pulse oximeters has been reduced to 5 per cent from 12 per cent at present. The tax rate on “any other drug recommended by Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatment” would also be capped at 5 per cent, the Finance Ministry said.
The GST tax rate on medical grade oxygen, oxygen concentrators, ventilators, BiPAP machines, and high flow nasal cannula (HFNC) devices has been cut to 5 per cent from 12 per cent, Finance Minister Nirmala Sitharaman said. Even taxes on COVID testing kits have been reduced to 5 per cent from earlier 12 per cent.