Subscribe
My Reads e-paper Newsletters IFSC Code Finder New
Subscribe
OPEN APP
Home >News >India >States need fiscal support to fight covid: Naveen Patnaik

States need fiscal support to fight covid: Naveen Patnaik

Premium
Odisha chief minister Naveen Patnaik.

  • Patnaik said in a letter to finance minister Nirmala Sitharaman that states have been asked to purchase vaccines for people in the 18-45 years age group and that GST on vaccines would make the purchases costly for the states

NEW DELHI : Odisha chief minister Naveen Patnaik has asked the Central government to give Goods and Services Tax (GST) exemption to Covid-vaccines and give fiscal support to states to fight back the pandemic.

Odisha chief minister Naveen Patnaik has asked the Central government to give Goods and Services Tax (GST) exemption to Covid-vaccines and give fiscal support to states to fight back the pandemic.

Patnaik said in a letter to finance minister Nirmala Sitharaman that states have been asked to purchase vaccines for people in the 18-45 years age group and that GST on vaccines would make the purchases costly for the states. “Hence GST needs to be exempted completely. It will reduce the cost for states and facilitate our drive towards universal immunisation," the chief minister said. Mint has seen a copy of the letter.

Patnaik said in a letter to finance minister Nirmala Sitharaman that states have been asked to purchase vaccines for people in the 18-45 years age group and that GST on vaccines would make the purchases costly for the states. “Hence GST needs to be exempted completely. It will reduce the cost for states and facilitate our drive towards universal immunisation," the chief minister said. Mint has seen a copy of the letter.

Subscribe to Continue Reading

Patnaik also urged the Centre to share with states a part of the funds raised as cess and surcharges on products like petrol and diesel which are exclusively available to the union government.

Centre’s practice of levying cess on various items to raise revenue without having to share with states has been a bone of contention between the two. In the case of petrol and diesel too, a part of the excise duty is levied in the form of road and infrastructure cess.

The Odisha chief minister said in the letter that in the long and sustained effort required to fight Covid, it is important that the states are supported so that the entire country fights as one. “Lack of finances should not affect any state, affecting the entire country in turn," said Patnaik. Sharing the proceeds of cess with states will help in provision of vaccines, free treatment and in undertaking preventive measures, Patnaik said.

Patnaik’s suggestion also indicates how desperate states are for funds to deal with a huge humanitarian crisis. India is currently accepting medical aid from several countries and have temporarily suspended custom duty on imported supplies. On domestic vaccines, one technical challenge in removing GST is that, it will lead to piling up of unused credits for the taxes paid on raw materials and services with vaccine producers. Not being able to use this credit could force them to raise prices.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!