Covid-19 vaccine policy change likely to resolve GST rate cut demand

The Centre's new vaccine procurement policy may lay to rest the demands for tax cut in Covid-19 vaccines.

 

Although the Group of Ministers (GoM) headed by Meghalaya Chief Minister Conrad Sangma has not made any concrete recommendation on rates for vaccine, the demand made by some states to lower it may be practically met after the change in vaccination policy.  The Centre will now procure 75 per cent of all the vaccine produced in the country and provide them to states for free.

 

However, the private procurement of 25 per cent of vaccines would require a payment of 5 per cent GST, an official said. The issue of GST rate on vaccines will now be discussed in the meeting of the GST Council expected to be held this month.

 

The meeting of the GST Council, the date for which is yet to be finalised, will also discuss recommendations made by the GoM such as temporarily reducing GST rate to 5 per cent on commercial imports and domestic supply of Covid-19 medicines and materials including medical grade oxygen, oxygen concentrators, pulse oximeters and testing kits.

 

The GoM has Gujarat deputy CM Nitinbhai Patel, Maharashtra deputy CM Ajit Pawar, Goa transport minister Mauvin Godinho, Kerala finance minister KN Balagopal, Odisha finance minister Niranjan Pujari, Telangana finance minister T Harish Rao and UP finance minister Suresh Kumar Khanna. The panel submitted its report to Union Finance Minister Nirmala Sitharaman on Monday.