On Friday, Finance Minister Nirmala Sitharaman moderated the 43rd goods and services tax, through video conference. The main agendas of the meeting was to purpose on GST tax on COVID-related essentials, however, no consensus was reached on the reduction of tax rates over vaccines. The decision over tax rates on COVID vaccines was referred to a group of ministers (GOM), which will be announced by June 8, said the Finance Minister while addressing a press conference after the GST Council meet.
According to sources, the GST council had announced that quarterly returns for small traders will continue and has provided relaxation of the late fee penalty for payment of GST. The Council will constitute a group of ministers to examine the Covid cess to be levied in Sikkim on the pharmaceutical and power sectors.
According to the Ministry of Finance, the meeting was attended by Anurag Thakur, Minister of State for Finance, along with finance ministers and senior officials of the states and union territories. The meeting looked into states’ request for a cut in GST rates on essential Covid-related supplies such as medicines, vaccines, etc.
Recently, Punjab finance minister Manpreet Singh Badal in a letter to Finance Minister Nirmala Sitharaman had asked the central government to consider the GST exemption on essential Covid-related related items such as face masks hand sanitisers, gloves, temperature scanners, PPE Kits, oximeters, ventilators and other such essential medical supplies. He specified that these items attract a basic customs duty of 20 per cent and a GST of up to 18 per cent.
Additionally, a 10 per cent social welfare surcharge is levied on such items. As IGST is charged on the taxable value, which includes import duties, the effective burden exceeds by another 2-3 per cent, added the Punjab finance minister.
Earlier this month, the Finance Minister virtually ruled out exempting COVID-19 medicines, vaccines, as well as oxygen concentrators from the ambit of GST, stating that such an exemption will make the lifesaving Earlier this month, the Finance Minister virtually ruled out exempting COVID-19 medicines, vaccines, as well as oxygen concentrators from the ambit of GST, stating that such an exemption will make the lifesaving .
Presently, domestic supplies and commercial imports of vaccines attract a five per cent GST, while COVID-19 drugs and oxygen concentrators attract a 12 per cent levy. With regard to the issue of compensation payable to states, the central government has estimated the shortfall at Rs 2.69 lakh crore.
