GST council cuts rates on Covid-19 essentials to 5%

It agreed to stick to 5% tax rate on vaccines

The GST Council Saturday waived tax rates on medicines to treat black fungus and reduced levies on a host of Covid-19 essentials such as ventilators, ambulances, test kits and hand sanitisers, in a move that is expected to give much needed relief to the common man fighting the second wave of the pandemic.

GST rates were brought down to nil on black fungus drugs — Amphotericin and Tocilizumab — and reduced to 5% on Remdesivir, used for treating Covid, from the earlier 12%.

However, the GST rate on Covid vaccine will remain unchanged at 5%.

“The 5% GST on vaccines will stay. The Centre will buy the 75% vaccine as announced and will pay its GST too. But 70% of income from GST will be shared with the states," Finance Minister Nirmala Sitharaman said briefing reporters on the GST Council decisions.

The Council decided to cut tax rates from 12% to 5% on medical grade oxygen, ventilators, pulse oximeter and oxygen concentrators while the rate was brought down to 12% on ambulances from the existing 28%.

The new rates will be valid till September.

The tax rates were reduced based on the recommendations of a Group of Ministers set up last month headed by Meghalaya Deputy Chief Minister Conrad Sangma to examine whether any GST concessions or exemptions should be given on Covid-relief items.

The Council agreed to almost all suggestions given by the GoM.

The thorny issue of GST compensation cess did not come up in Saturday’s meeting, with Sitharaman saying another meeting to sort out the issue will be held soon.

Finance ministers from Congress-ruled states walked out of the GST Council meeting after expressing their disapproval on not providing zero-rate GST on Covid relief items.