The GST Council, comprised of finance ministers of all states and chaired by union finance minister Nirmala Sitharaman, will meet on June 12 to decide on reducing the GST tax rates on items essential to fight COVID-19 and black fungus. The recommendations of the GoM(Group of Ministers) on tax cuts will be discussed in the upcoming meeting.
It may be recalled that the GST Council had last met on May 28 to discuss tax exemptions on COVID essential items, among other things. It was then decided to form a GoM which would submit its recommendations on the tax relief that can be provided on items like PPE kits, masks, vaccines, oxygen concentrators, hand sanitizers, ventilators and some other items required against coronavirus. The GoM submitted its report on June 7.
On Wednesday, a GoM member and finance minister of Uttar Pradesh, Suresh Khanna, said that the state prefers a tax cut on essential items in order to facilitate COVID-19 patients. However, he added that the state would accept whatever decision the council takes.
The issue of GST cuts has become a political hot potato with some opposition ruled states pressing the central government to reduce GST rates on items essential to fight the pandemic. On the other hand, BJP governments have argued that the move would not provide any tangible benefits to the people. Considering the impasse, no decision could be taken in the council’s previous meeting on May 28. However, it was agreed upon to not apply GST on the import of Amphotericin B which is used to treat patients of black fungus.
At present, a GST rate of 5% is applicable on vaccines made in the country while COVID-19 drugs and oxygen concentrators are taxed at 12%.