Following the 44th GST Council Meet, FM Nirmala Sitharaman announced that COVID-19 vaccine will continue to have a 5% GST applied on it. Further, it was also announced that no indirect tax will be applied on black fungus medicines such as Tocilizumab and Amphotericin B. The 44th GST Council was chaired by the Indian Finance Minister on Saturday via video conferencing.
5% GST on vaccines will stay. The Centre will buy the 75% vaccine as announced and will pay its GST too. But 70% of income from GST will be shared with States: Union Finance Minister Nirmala Sitharaman pic.twitter.com/fLlHrc8ZOQ
— ANI (@ANI) June 12, 2021
The Goods & Service Tax council was chaired by the Indian Finance Minister and a slew of GST rate slashes were announced. The FM also approved certain recommendation by the Group of Ministers to keep the GST rate on certain services and products as is.
Here are the biggest announcements made by the 44th GST Council
GST Vaccine to continue attracting 5% GST
5% GST will continue to be imposed on all COVID-19 vaccines. Meanwhile, GST percentage for a COVID-19 essential drug Remdesivir and anti-coagulant has been slashed to 5% from its earlier rate of 12%. Further, all the medicines that are used to treat mucormycosis or black fungus, will not see any indirect tax imposed.
Medical grade oxygen, oxygen concentrators to attract 5% GST
The Finance Minister announced that indirect tax on essential medical products such as medical grade oxygen, oxygen concentrators, Bilevel Positive Airway Pressure or (BiPAP) machines, High Flow Nasal Cannula (HFNC) machines, has been slashed down from 12% to 5%. Moreover, COVID-19 testing kits, which came with 12% GST will now saw 5% GST posed.
The state of ambulances, crematoriums & temperature checking devices
Another change introduced in the GST Council Meet came in the form of pulse oximeters, hand sanitizers, temperature checking devices, to attract the lowest 5% GST. Earlier, ambulances used to see a GST imposition of an exorbitant 28%. Now, the GST council has announced that ambulances will see 12% GST imposition. Further, electric, gas or other kinds of furnaces set up in crematoriums, and their installation will attract 5% GST. Earlier, crematoriums and their setup attracted 18% GST.
“GST rate on vaccine will have no effect on people”: Sitharaman
FM Sitharaman also announced that the Centre will continue procuring 75% of the vaccines and will pay GST on it. However, the states will receive a 70% share of GST income from the Centre. In her announcement, Sitharaman said that as the procurement and GST payment will be done by the Centre on COVID-19 vaccines, and the vaccines will be freely administered to the public, the stay on GST rate will have no impact on the public.
GST Council Approves GoM’s recommendations
The announcement by the Finance Minister came after the 44th GST Council Meeting was held on June 12. Along with the Finance Minister of the nation, Anurag Thakur who serves as Minister of State for Finance and other Finance Ministers from different states and U/T also joined the meeting. During the announcement, Sitharaman said that the GST council on deliberate consideration approved certain recommendations that came from the GoM (Group of Ministers) in the 43rd GST Council meet.
“The GoM’s recommendations have been accepted. They had suggested that these cuts be applicable till August 31. After discussions, it has been decided that these rates will be applicable till September 30, 2021,”
-the Finance Minister said.
The Group of Ministers include – Meghalaya CM Conrad Sangma, Gujarat Deputy CM Nitin Patel, Goa Transport Minister Mauvin Godinho, Kerala FM K.N. Balagopal, Odisha FM Niranjan Pujari, Telangana FM T. Harish Rao, Uttar Pradesh FM Suresh Khanna, Maharashtra Deputy CM Ajit Pawar.
Earlier in 43rd GST Council Meet
Earlier in the 43rd GST Council Meet that was held on May 28, the Council reserved its decision on cutting the GST rate or zero-rating COVID-19 vaccines. However, it did decide to exempt items that belonged in the COVID-related category and are imported to the country by the government on payment basis to then donate it to the state authorities or relief organization.