GST slashed on Covid-19 items : Nirmala Sitharaman

The GST Council on Saturday slashed tax rate on COVID-19 drugs such as Remdesivir and Tocilizumab as well as on medical oxygen and oxygen concentrators but ignored demands for reduction in taxes on vaccines.

Addressing the media post the GST Council meet, Finance Minister Nirmala Sitharaman said that the council agreed to go with the recommendations of the Group of Ministers (GoM) that was single point agenda on the council.

Sitharaman also said that Centre will be paying and receiving 75 per cent of all the tax collected on it, which will be further distributed with states. She had earlier said that exempting vaccines from GST would deny input tax credit on raw material and supplies that could impact its pricing.

This includes electric furnaces used in crematoriums, where the GoM had suggested as 12% GST rate, but the Council has reduced it to 5%. Similarly, for temperature checking equipment, the GoM had recommended an 18% GST which has been slashed to 5%.  

On ambulances, the GoM had recommended a 28% rate. “However, after discussions, because of the crisis and as this is an enduring asset for hospitals, we thought even ambulances should be brought down. So the rate on ambulances has been brought down to 12%,” Ms Sitharaman said.  

Low availability of medical grade oxygen in hospitals was witnessed during the initial period of the second wave of Covid-19 and in the first wave, it was the lack of ventilators which was a grave concern in the country.

Rates of pulse oximeters, hand sanitisers, temperature check equipment, gas, electric or other furnaces for crematorium, including their installation among others have also been reduced to 5 per cent.

Now, Covid testing kits too would be taxed at 5 per cent, against the previous rate of 12 per cent.

These rate reductions/exemptions shall remain in force upto 30th September 2021.

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