Notify Covid-19 vaccines as zero-rated supply under GST, say experts

Tax waiver on entire Covid-related supply chain could prevent a rise in price

Though Union finance minister Nirmala Sitharaman has ruled out a Goods and Services Tax (GST) waiver on Covid-19 vaccines over concerns of final price escalation, state finance ministers and tax experts remain sceptical about the argument.

While a GST waiver on vaccines would indeed deprive manufactures of the benefit of input tax credit (ITC), resulting in a price increase for end users, experts point out that a tax waiver for the entire input supply chain would help bring down the cost of vaccines.  

The other option, experts say, is to notify Covid-19 vaccines as ‘zero-rated supply’ under GST, which would enable manufacturers