Last week, the government rejected demands to fully exempt the Goods and Services Tax (GST) on vaccines, medicines and medical equipment used to deal with Covid-19 saying if a full GST exemption was given on these items, domestic producers would be unable to offset the input taxes paid and would pass them to the consumers by increasing their prices. Apparently, the government has not looked at better options.
GST is applicable on domestic supplies and commercial import of vaccines at 5 per cent and on Covid drugs, oxygen concentrators, etc. at 12 per cent. Many inputs and input services used to
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