After waiving off customs duty, the government may now waive Goods and Services Tax (GST) on coronavirus vaccines to reduce their costs. The COVID-19 vaccines are priced up to Rs 1,200 in private hospitals. Serum Institute's Covishield is priced at Rs 300 per dose for state government and Rs 600 for private hospitals, while Bharat Biotech's Covaxin is priced at Rs 600 per dose for state governments and Rs 1,200 for private hospitals. Every person is required to take two doses.
The GST waiver may come as the government is looking to ease the burden on people and encourage more vaccination, as mentioned in a report in Hindustan Times. The government has already waived off import duty on pharmaceutical raw materials required to manufacture drugs for coronavirus treatment. Centre is now mulling removing the 5 per cent GST on coronavirus vaccines on similar grounds, sources told the daily.
A person in the know told the daily that the waiver will require the approval of the GST Council but it is unlikely that anyone would oppose the move. The revenue implication of this waiver will also not be significant, the person said. So far there is no official statement by the Finance Ministry.
The government announced the liberalised and accelerated Phase 3 strategy of COVID-19 vaccination that permits manufacturers to release up to 50 per cent of their stock to state governments and private entities. The manufacturers had announced their rates to this end.
Serum Institute that had initially priced the doses for state governments at Rs 400, reduced it to Rs 300 per dose after the government asked the vaccine makers to reconsider their pricing. CEO Adar Poonawalla said, "As a philanthropic gesture on behalf of @SerumInstIndia, I hereby reduce the price to the states from Rs 400 to Rs 300 per dose, effective immediately; this will save thousands of crores of state funds. This will enable more vaccinations and save countless lives."
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