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The Goods and Services Tax (GST) Council, at its ‘single-agenda’ meeting, has slashed tax rate on COVID-19 drugs such as Remdesivir and Tocilizumab as well as on medical oxygen and oxygen concentrators but ignored demands for reduction in taxes on vaccines. A 5 per cent GST levy on vaccines will continue which will allow manufacturers to get benefit of settling taxes paid on inputs. Finance Minister Nirmala Sitharaman explained that the 5 per cent levy will not put any additional burden on common man as the government was procuring all vaccines and giving them to citizens for free. The reduced tax rates were based on a recommendation of a group of ministers, headed by Meghalaya Deputy Chief Minister Conrad Sangma, and would remain effective till September 30, 2021.

GST rate on Covid vaccines was retained at 5 per cent as the Council felt that majority of the vaccine procurement was being done by the Centre and given free to people. Sitharaman said ‘Central government is purchasing 75 per cent and is paying GST also. But the impact of this GST on people will be nil since people would be getting vaccines free of cost at government hospitals. Centre is purchasing and it is given free to people’.

GST on Tocilizumab and Amphotericin B is slashed to nil from 5 per cent, the rate on Remdesivir and anticoagulants like Heparin is lowered from 12 per cent to 5 per cent. GST rate on ambulance has been cut to 12 per cent from 28 per cent. Tax on medical grade oxygen, oxygen concentrator (including personal imports), ventilators, BiPAP machines and high flow nasal cannula (HFNC) devices has been cut to 5 per cent from 12 per cent. Also, tax on Covid testing kits, pulse oximeter (including personal imports) has been brought down to 5 per cent from 12 per cent. Hand sanitisers, temperature check equipment, gas/electric furnaces for crematoriums too will attract lower 5 per cent tax, compared to 18 per cent earlier.