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Centre may call GST meeting this month as states seek rate cuts on essential medical items

Many states, including Delhi, Punjab and Chhattisgarh, want GST to be exempted temporarily on devices such as ventilators, concentrators, and life-saving drugs like Remdesivir.

May 04, 2021 / 07:54 PM IST
Finance Ministe Nirmala Sitharaman and Minister of State for Finance Anurag Thakur (Image: Finance Ministry Twitter handle)

Finance Ministe Nirmala Sitharaman and Minister of State for Finance Anurag Thakur (Image: Finance Ministry Twitter handle)

The Centre may call a meeting of the Goods and Service Tax (GST) Council within the next few weeks, with the agenda likely to be tax rates on items that are essential in the fight against COVID-19.

This comes even as a number of states have publicly asked that a GST Council meeting be held in order to reduce rates on essential items such as oxygen concentrators, ventilators, life-saving drugs, or that the Centre take an executive decision on the same under the GST laws.

“A meeting will be held soon. A new agenda for the GST Council is being drawn up. We had prepared an agenda for a planned Council meeting before the second wave of COVID-19, but now have had to make a new one in light of the current situation,” a top government official told Moneycontrol.

Another official said that the next meeting would likely be held in the month of May itself, though a final date is yet to be decided. The last GST Council meeting was held in October 2020.

On May 3, Delhi Deputy-Chief Minister Manish Sisodia wrote to Finance Minister Nirmala Sitharaman asking that GST on oxygen concentrators be waived off for a period of six months. Sisodia wrote that concentrators were “essential life support machines” given the surging COVID cases in the Capital and citizens would benefit if the GST component of the price could be waived off.

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Oxygen concentrators attracted a GST of 28 percent, which last week was brought down to 12 percent. On May 3, the Centre waived off integrated GST on a number of imported items like concentrators, medical-grade oxygen, ventilators, and life-saving drugs such as Remdesivir, Tocilizumab,  and Favipiravir. The IGST and customs waiver are for the items being sent to India by other nations as a form of donation, and being distributed by non-government bodies like Red Cross.

However, what some states, including Delhi, are asking for is clarity on the domestically produced essential medical items.

Punjab and Chattisgarh are among the states which have sought an emergency meeting of the GST Council, in order to review the rates of life-saving equipment and drugs.

For example, according to Business Standard, amidst the shortage of Remdesivir across the country, Chhattisgarh has placed an order for 90,000 Remdesivir injections, worth Rs 14.11 crore, with pharma major Mylan Laboratories.

“We have placed the order with Mylan for 90,000 injections at the rate of Rs 1,400 plus 12 percent GST. Around 2,000 injections will come in two days and another 28,000 within a week, which makes it 30,000 a week,” TS Singh Deo, the state’s health minister, was quoted as saying by the newspaper.

Moneycontrol had reported in March that the Centre was ready to discuss with states on bringing in petrol and diesel under GST, which Sitharaman later clarified in Parliament. It is now understood that this issue was part of the earlier GST Council agenda being drawn up before the sharp increase in daily COVID-19 cases. This and other related discussions are now scrapped, with the focus expected to be on the pandemic.
Arup Roychoudhury
first published: May 4, 2021 07:28 pm

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