No consensus yet on reduction of GST rates on vaccines, COVID essentials: Sources

NEW DELHI: The Group of Ministers (GoM) set up to examine the issue of GST exemption on critical pandemic relief supplies, including Covid-19 vaccines failed to reach a consensus and the matter may go back to the Council.

“There is no clear consensus yet. It is a divided mandate. However, many aspects have been discussed. If there is no consensus, if there is no agreement, the matter will go back to the council again. A report will be submitted on the observations that were made during the deliberation,” a source aware of the development told TNIE.

Sources say, the report was submitted on Monday to the finance minister.

Slashing of GST rates on medicines, medical grade oxygen, pulse oximeters, test kits, hand sanitisers, oxygen therapy equipment, ventilators and other supplies was on the top of agenda in the last GST council meeting.

There was a lot of deliberation on this matter after the fitment committee said reducing GST would result in revenue losses.

Several states, however, said the rates have to be reduced else it will add to the burden of common people.

Opposition states, including West Bengal, Kerala and Punjab, have been demanding that the GST levied on Covid-related items be scrapped.

The finance minister had then formed a GoM to examine the issue headed by Meghalaya Chief Minister Conrad Sangma.

“I have decided and announced a group of ministers to submit a report within ten days on or before June 8 so that if there are any further reductions that need to be done, will be done,” Finance Minister Nirmala Sitharaman had said in a media briefing after the meeting.

She also added that the revenue implications were not driving the rate cut reluctance.

Why Finance Minister is not keen on vaccine GST exemption

According to the Finance Minister, if exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer.