On 28th May 2021, the 43rd GST Council meeting chaired by Finance Minister Nirmala Sitharaman met almost after a period of 7 months. The main agenda of the meeting was to discuss GST waiver that can be extended to covid relief items like vaccines, drugs and others.
Further, the Finance Ministry has formed a Group of Ministers (GoM) to examine more GST waiver on essential COVID related items, including vaccines. Still confused? Well, let’s dive in.
Takeaways from the 43rd GST Council Meeting
After enough deliberations and discussions, the council decided on providing GST waiver on several covid related items. However, this GST waiver will only apply to items that are being imported. And it will include both freely procured items and the ones that are paid for.
So, what’s the Controversy around the GST Waiver?
So, the government has provided GST waiver for covid related items, right? Then why are people critiquing this? Well, this is definitely a step in the right direction. However, many find this to be inadequate.
The first catch is that the GST waiver will only apply to organisations and NGOs that have been recognised by the government. This will definitely encourage NGOs to continue with their noble endeavours. However, this also leaves out individuals and organisations that aren’t recognised by the government from availing of the GST waiver.
The main contention is around the question of GST waiver for domestic covid relief items, especially vaccines. In India, the major two vaccines in circulation are Covishield and Covaxin, both of which are manufactured in India itself. Currently, both the vaccines attract a GST of 5% while most other domestic covid related items like testing kits, oxygen-related equipment attract GST in the range of 12%-18%.
So, Domestic Covid Relief Items are not GST exempt?
Well, it seems that domestic covid related items will also come within the gambit of GST waiver. The finance ministry has constituted an eight-member group of ministers (GOM) who will look into the question of providing GST waiver to domestic covid related items especially vaccines. The body will have to submit its report to the GST council by 8th June after which further decision will be taken.
However, some stalwarts have raised their eyebrows regarding the waiting period till 8th June to get a verdict of further GST waiver. EY India tax partner Abhishek Jain found this further wait “disappointing”. A similar concern was raised by Sanjay Bhutani, director of the Medical Technology Association of India.
The Road Ahead
The additional wait period might be a tad bit frustrating. However, it seems that the government is serious about extending GST waiver to domestic covid related items. And hopefully, we will soon be able to see a dip in the price of these items.
So what do you think? Will domestic vaccines be exempted from GST in the near future?
Still confused about the implications of the GST waiver on covid items? Well, fret not. We are here to clarify all our doubts. Shoot your questions TaxQ&A and we promise to answer them all in the simplest way!