COVID-19: GST on vaccines in interest of manufacturers and citizens, says FM Sitharaman–business today

Clipped from: https://www.businesstoday.in/current/economy-politics/covid-19-gst-on-vaccine-in-interest-of-manufacturers-and-citizens-says-fm-sitharaman/story/438643.html

Sitharaman said exemption from GST for domestic supplies and commercial import of vaccines, COVID drugs and oxygen concentrators will increase the price of these items.

A 5 per cent GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund, FM Sitharaman said.

Responding to West Bengal Chief Minister Mamata Banerjee’s letter to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman on Sunday said the Centre has already granted exemptions from all duties for COVID-19 related supplies, and the Goods and Services Tax (GST) levied on vaccines is in the interest of manufacturers and citizens.

Earlier today, Banerjee requested the prime minister to waive all forms of taxes and customs duty on equipment and drugs being used to fight the COVID-19 pandemic.

In a series of tweets, Sitharaman said exemption from GST for domestic supplies and commercial import of vaccines, COVID drugs and oxygen concentrators will increase the price of these items.

1/ Hon. CM of West Bengal @MamataOfficial has written to the Hon @PMOIndia seeking exemption from GST/Customs duty and other duties and taxes on some items and COVID related drugs.

My response is given in the following 15 tweets.@ANI@PIB_India@PIBKolkatapic.twitter.com/YmcZVuL7XO– Nirmala Sitharaman (@nsitharaman) May 9, 2021

9/ GST at rates varying from 5% (on vaccines), 12% (COVID drugs, oxygen concentrators) is applicable to domestic supplies and commercial import of these items.@ANI@PIB_India@PIBKolkata– Nirmala Sitharaman (@nsitharaman) May 9, 2021

“If full exemption from GST were given, the domestic producers of these items would be unable to offset taxes paid on their inputs and input services and would pass these on to the end consumers by increasing their price,” the finance minister said, adding that a nominal 5 per cent GST is in the interest of the domestic manufacturer of vaccine and in the interest of the citizens.

“A 5 per cent GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund. Hence exemption to vaccine from GST would be counterproductive without benefiting the consumer,” she added.

Sitharaman also pointed out that states end up receiving almost 70 per cent of the total revenue collected by the Centre through GST.

14/ So States end up receiving almost 70% of the total revenue collected from vaccines.

In fact, a nominal 5% GST is in the interest of the domestic manufacturer of vaccine and in the interest of the citizens.@ANI@PIB_India@PIBKolkata– Nirmala Sitharaman (@nsitharaman) May 9, 2021

On Banerjee’s demand for removal of customs duty, IGST and other taxes, the finance minister said the Centre has already provided these exemptions.

3/ Full exemption from Customs duties, including IGST, is already available to ALL COVID relief material (not confined to a list) imported by @IndianRedCross for free distribution in the country.@ANI@PIB_India@PIBKolkata– Nirmala Sitharaman (@nsitharaman) May 9, 2021

5/ Also to Medical Oxygen, equipment used for the manufacture, storage and transportation of oxygen, equipment used for providing oxygen therapy to COVID patients such as Oxygen Concentrators, Ventilators, Non-invasive oxygen masks etc.@ANI@PIB_India@PIBKolkata– Nirmala Sitharaman (@nsitharaman) May 9, 2021

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s