44th GST Council Meeting: Taxes Reduced On COVID Essentials

44th GST Council
Source: Money Control

The union Finance and Corporate Affairs Minister Nirmala Sitharaman presided over the 44th GST council meeting, discussing the issue of tax waiver for COVID essentials. The meeting was held via video conferencing and was attended by Anurag Thakur, the union’s Minister of State for Finance and Corporate Affairs, and the finance ministers of states and union territories (UTs) to discuss compensations for states’ revenue shortfalls of 2.35 lakh crores.

During this meeting, it was proposed to reduce the GST rates for items that were used in the COVID-19 relief program such as hand sanitisers, masks, gloves, safety products, thermal scanners, as well as taking decisions regarding COVID-19 related individual items based on the report by the Group of Ministers (GoM).

The finance minister told the media that the Council decided to follow the recommendations made by the GoM, after the meeting. “It was felt that the GoM’s recommendations have brought substantial change. [The] GST council largely agreed to go with the recommendations, except for some slight tweaking,” said Sitharaman.


Read more about the tax exemptions examined by the GoM for COVID vaccines.


It was decided that COVID vaccines will remain subject to 5 percent GST. Money Control reported that the Centre will pay GST on the vaccines and will buy it at 75 percent. However, Sitharaman said that 70 percent of the GST income would be given to the states. In addition, no tax will be charged on Amphotericin B, the medicine used to treat black fungus. Similarly, tocilizumab, a monoclonal antibody administered to COVID-19 patients, is exempt from GST. Anticoagulants such as Heparin and high flow nasal cannulas (HFNCs) assessed at 12 percent in the past are also exempt from GST. Hand sanitisers and temperature check equipment are now subject to a 5 percent GST, while for ambulances, the GST will be reduced from 28 to 12 percent. A 12 percent charge will continue to be applied to genome sequencing kits.

The central and state governments have been deeply divided on this issue. State governments will not have to bear the 5 percent tax burden on vaccine procurement due to the Centre’s decision to provide the vaccines free of charge to states June 21 onwards. According to the Mint, a previous meeting of the Finance Ministry featured a presentation about the technical difficulties in removing the 5 percent GST on vaccines, which Nirmala Sitharaman said could potentially be a problem “counterproductive to consumers”. However, opposition ruled states have argued that given this pandemic is a once-in-a-century occurrence, the Council should consider this relief. In addition to states’ inputs, the GST implementation committee has recommended extending the September 30 deadline.

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