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Exempting Covid vaccine from GST would be counterproductive: FM to Bengal CM

YB WEB DESK. Dated: 5/10/2021 11:18:10 AM

New Delhi, May 7 Exemption given to vaccines from GST would be counterproductive without benefiting the consumer, Union Finance Minister Nirmala Sitharaman said in response to a letter by West Bengal CM Mamata Banerjee. In a series of tweets on Sunday, FM Sitharaman said items mentioned in CM Banerjee's letter to PM Narendra Modi have already been exempted from customs duty and health cess. The West Bengal Chief Minister has sought exemption of oxygen concentrators and Covid-related drugs from customs duty/SGST/CGST/IGST. A large number of organisations, individuals and agencies have come forward to help the state government and are seeking these exemptions for the same, she had said in her letter. Responding to the letter, Union Minister Nirmala Sitharaman said the Finance Ministry had issued a list of items exempted from GST, customs and other duties on May 3rd of this year. "Full exemption from Customs duties, including IGST, is already available for ALL COVID relief materials (not confined to a list) imported by @IndianRedCross for free distribution in the country," said FM Sitharaman. She went on to add that Remdesivir injections and API (active pharmaceutical ingredient) were also exempted from duties. She goes on to say, "This exemption applies to all above-mentioned goods when imported free of cost for free distribution in the country by any entity, state govt, relief agency or autonomous body on the basis of a certificate issued by a state government." However, the Union Finance Minister did say that GST at 5 per cent on vaccines and 12 per cent on Covid-related drugs and oxygen concentrators is applicable to domestic supplies and commercial import of these items. Half of the GST collection on an item goes to the Centre and the other half to the states, she said. "Further 41 per cent of the CGST revenue is devolved to states. So, out of a collection of Rs 100, as much as Rs 70.50 is the states' share," said Minister Nirmala Sitharaman. Similarly, 41 per cent of the GST collected on vaccine is devolved to the states which means that states.