GST exemption on import of Covid-related equipment extended till August 31

 







In a move that is likely to help increase availability of critical equipment required in the treatment of Covid-19, the GST Council on Friday extended the GST exemption on import of Covid-related equipment received as relief till August 31.

The Council has also included Amphotericin-B, which is used in treatment of black fungus or mucormycosis, in the list of items exempted from GST.

The GST Council has however left taxes on Covid-19 vaccines and medical supplies unchanged. Earlier this month, Nirmala Sitharaman ruled out exempting Covid vaccines, medicines and oxygen concentrators from GST, saying such an exemption will make the lifesaving items costlier for consumers as manufacturers will not be able to offset the taxes paid on inputs.

Currently, domestic supplies and commercial imports of vaccines attract a 5 per cent GST while Covid drugs and oxygen concentrators attract a 12 per cent levy.

Issues of Covid-related equipment was one of the items on the agenda that had a very detailed discussion. Many issues were raised and discussed.... The GST Council has decided to exempt the import of relief items till August 31," Finance Minister Nirmala Sitharaman said after the 43rd GST Council meet.

A group of minister has been formed to submit a report before June 8 to decide on any further reduction in GST rates.

Apart from this, Nirmala Sitharaman announced an amnesty scheme for small GST taxpayers which will allow them to file returns with reduced late fee.

The finance minister said the central government will borrow Rs 1.58 lakh crore to compensate states for loss of revenue from GST.

"The GST Council will hold special a session to discuss extending paying compensation to states beyond 2022," she said after the meet.

The Council, which is headed by Union Finance Minister Nirmala Sitharaman and includes representatives of all states and Union territories, met for the first time on Friday in nearly eight months.

Ahead of the first meeting, finance ministers of eight non-BJP ruled states -- Rajasthan, Punjab, Chhattisgarh, Tamil Nadu, Maharashtra, Jharkhand, Kerala and West Bengal - had devised a joint strategy to press for a zero tax rate on Covid essentials.

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