GST COUNCIL's TAX RELIEF FOR COVID MANAGEMENT

[Dr. Sanjiv Agarwal]

The 44^th GST Council met on 12 June, 2021 for 44^th time, just after a fortnight of its last meeting to consider and decide upon GST tax relief to goods and services being used in Covid-19 treatment and management. This is based on widespread public demand to do so for quite some time, though the Ministry of Finance had its own reasons not to do so. This meeting was convened solely for considering the recommendations of Group of Ministers (GoM) set up in 43^rd Council meeting to recommend GST relief on goods and Services being used/ consumed in Covid treatment and management.

In its 44^th meeting, GST Council decided to temporarily:

1. Remove / fully exempt GST on two medicines
2. Reduce GST rate on 15 items used in Covid treatment such as :

• Medicines and drugs
• Medical grade oxygen
• Oxygen generation plants, equipments etc
• Covid testing kits
• Sanitizers
• Oximeters
• Ventilators
• Masks, canula, other equipments

3. Reduce levy on ambulances

These relaxations shall be for the time being applicable upto 30^th September, 2021, though the GoM had recommended the same till end of August, 2021. These relaxations shall be reviewed for continuity or otherwise when this term ends. The notifications to give effected are expected anytime.

However, GST @ 5 percent shall continue to be levied on Covid vaccines as it may not affect general public to a large extent as vaccines upto 75% are being provided for free to citizens and only 25% are available for a price. In such 75% cases, where free vaccine is being given, GST shall be applicable @ 5% but borne by the Central Government.

Table of new rates recommended

S. No.	Description	Present GST Rate	GST Rate recommended by GST Council
Medicines
1.	Tocilizumab	5%	Nil
2.	Amphotericin B	5%	Nil
3.	Anti-Coagulants like Heparin	12%	5%
4.	Remdesivir	12%	5%
5.	Any other drug recommended by Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatment	Applicable Rate	5%
Oxygen, Oxygen generation equipment and related medical devices
1.	Medical Grade Oxygen	12%	5%
2.	Oxygen Concentrator/ Generator, including personal imports thereof	12%	5%
3.	Ventilators	12%	5%
4.	Ventilator masks / canula / helmet	12%	5%
5.	BiPAP Machine	12%	5%
6.	High flow nasal canula (HFNC) device	12%	5%
Testing Kits and Machines
1.	Covid Testing Kits	12%	5%
2.	Specified Inflammatory Diagnostic Kits, namely D-Dimer, IL-6, Ferritin and LDH	12%	5%
Other Covid-19 related relief material
1.	Pulse Oximeters, incl personal imports thereof	12%	5%
2.	Hand Sanitizer	18%	5%
3.	Temperature check equipment	18%	5%
4.	Gas/Electric/other furnaces for crematorium, including their installation, etc.	18%	5%
5.	Ambulances	28%	12%

In order to bring down costs on oxygen, oxygen generation equipments and related medical devices, the Council reduced GST on these items from 12% to 5%. These are medical grade oxygen, oxygen concentrator, oxygen generator concentrator, oxygen generator (including personal imports), ventilators, ventilator masks, canula (HFNC) device. GST rates on Covid testing kits and specified inflammatory diagnostic kits – D-Dimer, IL-6, Ferritin and LDH – have also been brought down from 12% to 5%.  Other Covid-19 related relief materials have been also made cheaper. While GST on pulse oximeters (including personal imports) has been reduced from 12% to 5%, taxes on hand sanitizers, temperature check equipment, and gas, electric and other types of furnaces for crematorium, including their installation have been slashed from 18% to 5%. Relief is has been also given on purchase of ambulances by reducing GST on them from 28% to 12%.

While the GST rate reduction / waiver will bring down the prices to the extent of tax rate for end users, manufacturers may not be able to set off input tax credit to the full extent and where GST rate has been made zero / nil, no input tax credit may be available. Infact it would create a dilemma for the businesses as cost may actually not come down to the extent of GST reduced or waived but market would expect such price cut. This is because of no input tax credit available to such businesses where output is exempt Nevertheless, such reduction is a welcome step in present situation crippled with covid pandemic.

Discussions to this article

[OmPrakash jain]

sir,

The notfns issued by CBIC on 14.6.2021 are totally revenue oriented & are against the ratio decidendi of Delhi High court judgment in the case of Gurcharan Singh v. Ministry of Finance & Ors. 2021 (5) TMI 742 - DELHI HIGH COURT, against which the Govt. has intentionally obtained stay in the case of Ministry of Finance (Deptt. of Revenue) v. Gurcharan Singh. 2021 (6) TMI 595 - SC ORDER.