New Delhi, June 11: The Group of Ministers led by Chief Minister Conrad Sangma which is meeting on Saturday, is learnt to have recommended reduction of the GST rate temporarily to 5% for most of the Covid medicines and materials except vaccines.
The Goods and Services Tax Council will meet on Saturday to consider the recommendations of the group of ministers (GoM) to reduce taxes on most Covid-19 medicines and materials to give relief to the people, a government source said.
On Wednesday, Uttar Pradesh Finance Minister Suresh Kumar Khanna had said that his state government was also in favour of a reduction in GST rates on Covid-19 medicines and essentials. Khanna is one of the members of the GoM.
At present oxygen concentrators, medical grade oxygen, pulse oximeters and Covid testing kits, ventilators and slew of medicines including Remdesivir attract 12% GST on commercial imports and domestic supplies. GST is 18% on RT-PCR machines, protective garments, digital thermometers, laboratory sanitizers/disinfectants, paper bed sheets and road transport tanks.
Only N95 and surgical masks have GST rates of 5%. Many goods have BCD (basic customs duty) ranging up to 20% and Integrated GST up to 18% besides a social welfare surcharge of 10%.
As IGST is charged on taxable value that includes import duties, the effective burden exceeds by another 2-3%. Some states are batting for zero-rated-tax on Covid related items at least for a fixed period or taxing them minimally at 0.1% to avoid any implementation hurdles.
