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GST imposed on vaccines in India?

Nirmala Sitharaman replied to Mamata Banerjee, explains the tax on vaccines. Union Finance Minister Nirmala Sitharaman on Sunday responded in a series of tweets to West Bengal Chief Minister Mamata Banerjee after the latter wrote to the Centre seeking exemption from GST/customs and other duties, taxes on some items including Covid related drugs.

Finance Minister Nirmala Sitharaman on Sunday said that a 5 percent tax on vaccines and 12 percent on medicines and oxygen concentrators was necessary to keep costs low, after a new appeal by West Bengal Chief Minister Mamata Banerjee to waive these fees given India’s coronavirus crisis. And also added that the GST on vaccines and drugs helped manufacturers claim Input Tax Credit to keep costs low.

The West Bengal Chief Minister has sought exemption of oxygen concentrators and Covid-related drugs from customs duty/SGST/CGST/IGST. A large number of organisations, individuals and agencies have come forward to help the state government and are seeking these exemptions for the same, she had said in her letter to the Centre.

Responding to the letter, Union Minister Nirmala Sitharaman said the Finance Ministry had issued a list of items exempted from GST, customs and other duties on May 3rd of this year.

Finance Minister, Nirmala Sitharam further added that if the exemption were to be given to vaccines from GST it would be counterproductive without benefiting the consumer.

The Centre is not in favour of waiving the GST on vaccines as the move is expected to increase the prices of anti-COVID jabs, Sitharaman said.

How much comes in from the levies and is shared?

Sitharaman gave details of the tax share accruing to the states from the GST levied on these items. She said that if an IGST of Rs 100 is collected on an item, states and Centre get Rs 50 each as SGST and CGST, respectively. In addition, 41 percent of the CGST revenue is transferred to states as devolution. “So out of a collection of Rs 100, as much as Rs 70.50 is the share of the states,” she said.

 What other Ministers have to say about the tax imposed on vaccines?

Odisha Chief Minister, Naveen Patnaik on May 6, 2021, urged the Union government to give up Goods and Services Tax (GST) on vaccines for the novel coronavirus disease (COVID-19) to facilitate universal vaccination. He also sought for states a share of the cess and surcharges the Narendra Modi government mops up.

The Centre has asked states to buy their vaccines for the 18-45 age group, Patnaik pointed out in a letter to Union Finance Minister Nirmala Sitharaman. GST only adds to the financial burden of states. Hence, according to the CM, GST needs to be exempted completely. It will reduce the cost for the states and facilitate our drive towards universal vaccination.

Rajasthan Minister Pratap Khachariyawas on Saturday confronted the Central government over the imposition of Goods and Services Tax (GST) on COVID-19 vaccine and rising prices of fuel. He also opined that vaccination should be provided free of cost to every citizen of the country.

While speaking to the media, Pratap Khachariyawas strongly commented against the Centre’s move to impose GST on vaccines by saying, “Forget free vaccination, Centre is charging GST on COVID vaccines. Free vaccine is the right of every citizen of this country. It should be given to all without any discussion… The Centre has put GST on vaccines and started increasing prices of petrol and diesel.”

Application filed in the Supreme Court seeking to waive off GST on vaccines and oxygen

The Students Federation of India (SFI) has approached the Supreme Court with an application seeking directions to provide universal free vaccination to all citizens of India and to waive off the goods and service tax that has been levied on the import of the oxygen concentrators used for personal use.

According to the applicant, free vaccination by the Centre would help a large population including the poorer sections of the society get vaccinated and also help in improving the herd immunity amongst the citizens.

Taking note of the Finance Ministry’s recent decision to reduce the rate for import of goods and service tax of oxygen concentrators for personal use, the Federation has stated that GST should be waived off for the general public, as the same could be used/purchased at affordable prices for medical use.

NHAI exempts tankers carrying oxygen from toll fee on highways

The National Highways Authority of India on Saturday exempted tankers and containers carrying liquid medical oxygen across highways from user fee at toll plazas. Meanwhile, the Supreme Court constituted a 12-member National Task Force for streamlining the allocation of oxygen across India.

Pratheeksha Pawaskar

Intern, Goa Chronicle Law student, University of Mysore. Criminal Psychology and Constitutional Law are subjects of my personal interest. More of a “Philomath” (sucker for knowledge) with a great sense of humour. Always standing up for what is right.

DISCLAIMER: This article reflects author’s view point. Goa Chronicle may or may not subscribe to views of the author

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