UP govt favours GST cut on Covid items to facilitate patients: State FM

The Uttar Pradesh government is in favour of reduction of GST on Covid-19 essential items and hopes to bring back its tax collections to pre-pandemic levels on the back of improved economic activity, the state’s finance minister Suresh Kumar Khanna said today.

He also said that the state is in full preparedness for any third wave of Covid-19-19 but will never resort to hiking taxes to raise resources for fighting the pandemic.

"The moment experts predicted that a third Covid-19 wave may hit the country, the UP government has started making arrangements for 50 isolation and 50 ICU beds, and 10 beds for holding areas... We have also done manpower training," Khanna said in an online interaction with reporters here.

"We are all prepared (for the third Covid-19 wave). No one predicted a second wave, but we are fully prepared for the third wave if it comes," said Khanna, who also holds the Medical Education portfolio.

He said UP has not raised VAT rates to raise resources to fight Covid-19 and Value Added Tax on petrol and diesel is Rs 26.80 and Rs 17.48, respectively.

This is lower than the rates in states like Andhra Pradesh, Maharashtra, Odisha, Tamil Nadu and Chhattisgarh.

"We believe in bettering our own infrastructure, rather than raising tax rates. We will accept whatever decision the GST Council takes," he said.

When asked about lowering taxes on Covid-19 relief items, he said since he is a member of the Group of Ministers (GoM) on this issue, he would not be commenting on it. "However, the Uttar Pradesh government is in favour of tax rate cuts to facilitate patients," Khanna said.

The GoM on GST concessions on Covid-19 relief items was mandated to examine whether a GST rate cut or exemption is required for medical grade oxygen, pulse oximeters, hand sanitizers, oxygen therapy equipment like concentrators, ventilators, PPE kits, N-95 and surgical masks and temperature checking equipment.

Besides, the panel looked into Covid-19 vaccines, drugs, and medicines for Covid-19 treatment and testing kits for coronavirus detection.

The GoM was set up after the meeting of the GST Council, which is chaired by the Union Finance Minister and comprises state ministers, on May 28. The panel has submitted its report, which will now be taken up for consideration by the Council in its next meeting.

The GST Council on May 28 left taxes on Covid-19-19 vaccines and medical supplies unchanged after the BJP and Opposition-ruled states sparred over whether the tax rate cut benefits will reach the common man.

Congress and other Opposition- ruled states have been demanding a reduction in taxes but the central government felt the move may not result in tangible gains for people.

Currently, 5 per cent GST is levied on domestically manufactured vaccines, while it is 12 per cent for Covid-19 drugs and oxygen concentrators.