GoM to decide on GST exemption on vaccine, medical supplies

Relief on several Covid-related items now till Aug 31

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-Several Oppn-ruled states, including Punjab, press for complete GST exemption on vaxs, oxygen concentrators, oximeters, Covid test kits and ventilators

-GST Council to hold special session to discuss extending compensation to states beyond 2022

-Centre to borrow Rs 1.58 lakh cr to compensate states for loss of revenue from GST

-Amnesty scheme for small GST taxpayers, allowing filing of returns with reduced late fee

-GST Council decides to waive I-GST on free Covid-19 related supplies from abroad

– Exempts import of medicine used for treating black fungus from levy of I-GST

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Tribune News Service

New Delhi, May 28

A Group of Ministers (GoM) will decide within 10 days the question of providing GST exemption on Covid- related items, Union Finance Minister Nirmala Sitharaman announced at the end of the 46th GST Council meeting held via video-conferencing on Friday.

“There were protracted discussions with varying viewpoints. So, I announced the formation of a GoM which will submit its report by June 8 so that any further reductions that need to be done will be done,’’she said, pointing out that any duty relief must benefit patients and not the intermediaries.

The council, meeting after eight months, agreed to extend GST relief on several Covid-related items till August 31. It also decided to exempt Amphotericin-B drug used to fight black fungus from GST as well as waive IGST on covid-related supplies purchased for donation to the government.

The GoM was set up after hours of discussions failed to break the stalemate. Several Opposition-ruled states, including Punjab, pressed for complete GST exemption on vaccines, oxygen concentrators, oximeters, Covid test kits and ventilators. The Centre backed the recommendations of the rate fitment committee which has recommended rate cuts on four Covid-related items. It has left out over 10 Covid-related items, including vaccines, from further GST cuts. Sitharaman had expressed the same viewpoint while responding to West Bengal CM Mamata Banerjee’s letter earlier this month.

In all, the GST Council took seven decisions, including fixing compensation to states at Rs 1.58 lakh crore using the same methodology and formula as last year. The Centre will facilitate back-to-back borrowings by states from the RBI, Sitharaman said.

A special session will be convened to decide on the extension of the compensation period beyond July 2022. The Finance Minister said the GST Council extended the optional annual return filing facility for small taxpayers with a turnover less than Rs 2 crore. Only taxpayers with a turnover of over Rs 5 crore need to submit reconciliation statements for 2020-21.