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Business News/ News / India/  GST Council slashes tax on medical supplies needed for covid treatment
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GST Council slashes tax on medical supplies needed for covid treatment

Tax rate on drugs such as tocilizumab used in treating inflammatory and autoimmune conditions and anti-fungal drug Amphotericin B have been brought down from 5% to zero

The tax reduction on 18 classes of products will remain till end of September.Premium
The tax reduction on 18 classes of products will remain till end of September.

New Delhi: Federal indirect tax body the Goods and Services Tax (GST) Council on Saturday decided to cut taxes on key medical supplies, including oxygen concentrator, ventilators and drugs such as remdesivir, needed in covid-19 treatment.

The tax reduction on 18 classes of products will remain till end of September, an official statement said.

Accordingly, tax rate on drugs such as tocilizumab used in treating inflammatory and autoimmune conditions and anti-fungal drug Amphotericin B have been brought down from 5% to zero.

The tax rate on anti-viral drug remdesivir and anti-coagulants like heparin have been brought down from 12% to 5%. Also, any other drug recommended by the health ministry or the department of pharmaceuticals for covid treatment will also be taxed at the lower 5% rate, said the statement.

The tax rate on medical oxygen has been brought down to 5% from 12%. Certain related equipment such as oxygen concentrator, generator, ventilators, ventilator masks, canula and helmet, machines used in non-invasive ventilation therapy and high flow nasal canula device will also attract 5% tax instead of 12%.

Tax rate on select covid testing kits have also been reduced from 12% to 5%. Ambulances will now be taxed at 12% instead of 28%. The other items which got tax relief are pulse oximeters, hand sanitisers, temperature checking devices and gas or electric furnaces for crematoriums. These are currently taxed at either 12% or 18% will now be taxed at 5%, said the official statement.

In case of covid vaccines, 75% of locally produced vaccines are supplied free of cost to consumers and the tax rate will not impact consumers. Finance minister Nirmala Sitharaman who briefed reporters after the Council meeting said that on central government’s procurement of covid vaccines, it is paying the tax, and it has no impact on people.

“The Centre is buying, and whatever it is buying, is being supplied free of cost to people. So there is no impact of GST on people," the minister said.

Revenue secretary Tarun Bajaj said that the revenue implications to the government due to the tax cut was not relevant as the decision has been made in public interest and that the idea was to give people relief.

Ritesh Kanodia, partner at Dhruva Advisors LLP said the government has ensured that people are not burdened with the vaccine and GST cost by picking up the same, except where it may not matter--purchases by private parties.

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ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Published: 12 Jun 2021, 04:33 PM IST
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