FM Sitharaman says GST exemption on Covid-19 drugs to make them costlier

Finance minister nirmala-sitharaman-news

Finance minister nirmala-sitharaman-news

After West Bengal chief minister Mamata Banerjee wrote to prime minister Narendra Modi for exemption from GST and customs duty on COVID-19 products, Nirmala sitharaman financial minister came into light and explained the repercussions  of such a move. At present the domestic supplies in commercial imports of vaccines in curved 5% GST and 12% GST in case of COVID-19 drugs and oxygen concentrators." If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price. A 5 per cent GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund. Hence, exemption to the vaccine from GST would be counterproductive without benefiting the consumer," she tweeted. She further said that “if Integrated GST (IGST) ₹100 is collected on an item, ₹50 accrues to the Centre and the States each as Central GST and State GST respectively. Further 41 per cent of the CGST revenue is devoted to States. So out of a collection of ₹100, as much as ₹70.50 is the share of the states. From the GST collected on vaccines, half is earned by the Centre and the other half by the States. Further, 41 per cent of Centre's collections also get devolved to the States. So states end up receiving almost 70 per cent of the total revenue collected from vaccines. "In order to augment the availability of these items, government has also provided full exemption from basic customs duty and health cess to their commercial imports," Sitharaman said. Moreover, says that the government has exempted IGST on COVID-19 relief products import which are being received as donations from various countries via an order effective from 3rd may. And moreover the government has exempted from customs duty and health cess already.

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