GST Council meet today: what to expect
1 min read 12 Jun 2021, 09:30 AM ISTThere are many other structural issues of GST to be discussed including GST compensation to states beyond 2022 but it is unlikely to taken up in the half-day meeting
PremiumNEW DELHI: Federal indirect tax body the Goods and Services Tax (GST) Council will meet later today to discuss additional tax relief on medical supplies needed in prevention and treatment of the coronavirus disease.
Mint takes a look at what to expect:
GST on covid vaccines
This issue has been a matter of intense debate between central and state governments. With the Centre agreeing to supply covid vaccines free of cost to states from 21 June, states will not have to bear the 5% tax burden on vaccine procurement. However, the tax applicable on vaccines procured by private hospitals is expected to be discussed at the Council. Union finance minister Nirmala Sitharaman had explained the technical difficulties in removing the 5% GST on covid vaccines, saying it could be counter productive to consumers. But opposition states argue that the Council should consider this relief given that it is a once-in-a century pandemic.
GST on medical oxygen
The Council will also discuss tax relief on medical oxygen and related gear, pulse oximeters and covid testing kits. While the Centre is prepared to lower the rate to 5% from 12% on these items, the demand from opposition-ruled states is to remove taxes entirely on all medical items needed in covid management. A 5% tax rate, called the ‘merit rate’ is usually applicable on essential supplies. A panel of central and state government officials which examined tax relief proposals had earlier preferred a 5% tax rate for these medical supplies.
Medical equipment
The Council has also received suggestions for tax relief on equipment used by hospitals and ambulances. But it remains to be seen if there would be any change in the tax rates given that these are used by institutions and policy makers are unsure the benefits of a tax cut will be passed on to consumers.
Relief to small businesses
Small businesses expect a facility for quarterly tax payment. Now, they have the flexibility to file tax returns on a quarterly basis but have to pay taxes every month. A panel of officials were earlier asked to work out details of a scheme to allow quarterly payments. There are many other structural issues of GST to be discussed including GST compensation to states beyond 2022 but it is unlikely to taken up in the half-day meeting.
