Goods and Service Tax Council will hold a meeting on June 12 to discuss recommendations of Group of Ministers (GoM) on tax on COVID-19 vaccine and other equipment.
Last week, the GoM headed by Meghalaya CM Conrad Sangma recommended status quo on GST on vaccine at 5 per cent, while recommending tax reduction on a slew of COVID-19 related items like ventilators, personal protective equipment (PPE) kit, among others for a period of three months.
"The GoM has recommended retaining GST on COVID-19 vaccine at 5 per cent owing to issues related to input tax credit. The GoM has also recommended GST reduction on ventilators, PPE kits, and hand sanitisers, among others to 5 per cent from the current slab of 18 per cent," a source close to the development told BusinessToday.In.
The issue of reduction of tax rate on COVID-19 related goods and equipment was taken up in the council meeting held on May 28.
However, the council could not arrive at a consensus and instead decided to constitute a GoM headed by Meghalaya Chief Minister Conrad Sangma. While BJP ruled Gujarat, Odisha, opposition states like Punjab, Chhattisgarh, and other estates like Tamil Nadu Delhi and Kerala were in favour of zero rating of the vaccines on humanitarian grounds, some BJP ruled states as well as the Centre was not in favour of either zero rating or exemption to vaccines.
Ahead of the council meeting held on May 28, the rate fitment committee, under the council, which comprises indirect tax officials from the Centre and the states, had recommended reduction in GST rates of medical grade oxygen, oxygen concentrators, pulse oximeters and COVID-19 test kits. The committee too had recommended the status quo on GST on vaccines at 5 per cent.
The committee, however, had recommended against any tax reduction on PPEs, ventilators and other COVID-19 equipment.
Earlier responding to West Bengal Chief Minister Mamata Banerjee's letter demanding GST reduction on COVID-19 vaccines, Union Finance Minister Nirmala Sitharaman said that tax reduction on vaccines will lead to increase in price as manufacturers will not be able to offset their taxes with the taxes paid on inputs and pass it on the end consumers. The GoM too has taken the same line in its recommendations.