The Goods and Services Tax (GST) Council will meet on Saturday to discuss the tax waivers on COVID-19 essential items and medicines. This will be the second GST meeting of this fiscal. Finance Minister Nirmala Sitharaman chaired GST Council meeting on May 28, after a gap of seven months.
During the previous GST Council meeting, the states asked the finance minister to provide tax relief on COVID-19 essentials — PPE kits, masks, vaccines and medicines. Finance minister constituted a Group of Ministers (GoM) to examine possible waivers of GST levies essential supplies. Meghalaya chief minister Conrad Sangma has been designated as the convener of the eight-member GoM mad tasked to submit its recommendations to the council by June 8.
The GoM submitted its report on June 7. It has suggested rate cut on some COVID essentials to 5 per cent and no change in tax rate on vaccines, according to reports.
”While rate reductions on all essential medicines including those used in the treatment of COVID are a good welfare measure, it is necessary to ensure that the reductions are passed on in the form of lower prices to the patients,” said M S Mani, senior director, Deloitte India.
“The upcoming GST Council meeting is expected to consider further rate reductions on COVID relief materials. There is a possibility of further reduction in rates of COVID relief materials for a limited period,” Niraj Bagri, partner, Dhruva Advisors LLP.
“Since the GOM has recommended continuing with 5% GST on covid-19 related goods, the GST council is unlikely to deviate from the recommendation of the GOM,” said Ajinkya Gunjan Mishra, partner at L&L Partners.
“The suggestions to bring COVID-19 related goods under zero-rating or charge a token GST rate of 0.1% to enable refund of the tax has not found favour with the GOM. The underlying assumption is that the benefit of reduced tax would not be transferred to the consumers by way of a reduction in the MRP of the goods,” he said.
“Its is good to see that the Council is showing an urgency to decide on critical issues. Hopefully, they will balance out the concerns of revenue collections and impact on the common man and take an informed decision on the rate cuts,” said Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co.