44th GST Council Meeting: Tax on Covid-19 Combating Drugs & Devices

Amidst the claims or so-called rumours that the state will no longer exert pressure on the Government of India with reference to taxation related issues on Covid combating drugs and devices, The highest authority of GST in India, the 44th GST council Meeting that is chaired by Union Finance Minister, shall meet about the issue of whether to impose GST and if yes to what extent on the Covid related drugs and devices.

Check Latest Update in 44th GST Council Meeting

“FM Smt. @nsitharaman to hold a media briefing on the outcomes of the 44th GST Council meeting at 2:30 PM in New Delhi today.”

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44th GST Council Meeting: Updates in GST Rates on Covid-19 Related Medical Goods

S. No.	Description	Present GST Rate	GST Rate recommended by GST Council
Medicines
1.	Tocilizumab	5%	Nil
2.	Amphotericin B	5%	Nil
3.	Anti-Coagulants like Heparin	12%	5%
4.	Remdesivir	12%	5%
5.	Any other drug recommended by Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatment	Applicable Rate	5%
Oxygen, Oxygen generation equipment and related medical devices
1.	Medical Grade Oxygen	12%	5%
2.	Oxygen Concentrator/ Generator, including personal imports thereof	12%	5%
3.	Ventilators	12%	5%
4.	Ventilator masks / canula / helmet	12%	5%
5.	BiPAP Machine	12%	5%
6.	High flow nasal canula (HFNC) device	12%	5%
Testing Kits and Machines
1.	Covid Testing Kits	12%	5%
2.	Specified Inflammatory Diagnostic Kits, namely D-Dimer, IL-6, Ferritin and LDH	12%	5%
Other Covid-19 related relief material
1.	Pulse Oximeters, incl personal imports thereof	12%	5%
2.	Hand Sanitizer	18%	5%
3.	Temperature check equipment	18%	5%
4.	Gas/Electric/other furnaces for crematorium, including their installation, etc.	18%	5%
5.	Ambulances	28%	12%

Note: These rate reductions/exemptions shall remain in force upto 30^th September 2021.

Recalling history in a hurry, there has been a change in states’ posture(Opposition ruled states previously opposing Government of India for imposing GST on Covid combating drugs and devices) after the decision of the Prime Minister of India to rework the vaccination policy. The central government has recently taken a decision of procuring 75% of the production of Covid related drugs and later on transferring them to states. 

The panel that was set up by the Government of India, submitted its report earlier this week and has recommended a cut in levies for several products; however, it has refrained from either waiving GST completely or reducing it to a bare minimum, something that the Opposition-led states were constant demanding and pulling the Union government on this issue.

From oxygen concentrators to medical-grade oxygen along with testing kits, the panel has recommended a 5% levy as a temporary measure. However, states demanded cutting GST on PPE kits, masks and hand sanitisers..

Finance minister of Uttar Pradesh Suresh Kumar Khanna (also member of the GoM) had on Wednesday said the state is in favour of cutting taxes on Covid essentials to facilitate patients, but shall finally accept the decision of the GST Council on tax rates. 

In the past few days, opposition ruled states criticized the government for not deleting GST on Covid related drugs and devices and states further labelled Centre as “heartless”, a claim that the Finance Minister Nirmala Sitharaman suggested was not justified, given the fact that the panel is a permanent body that had decided to go by a formula of revenue-neutral rates at the time of the GST launch four years ago to protect revenue.

While Saturday’s 44th meeting of the GST Council is expected to be mainly confined to discussing the report of the GoM; however,  some states are also expected to raise the issue of compensation. States are demanding that the compensation period should also be extended by another five years, beyond the deadline of July 22.