The Goods and Service Tax (“GST”) Council, after its 43rd Meeting on May 28, 2021 had constituted a Group of Ministers (“GoM”) to deliberate on the rate of taxes on COVID-19 critical items – a consideration that was highly needed and awaited. After the recommendations were submitted by the GoM, the GST Council convened its 44th Meeting on June 12, 2021 and provided substantial relief in the GST rates for COVID-19 essential items. The recommendations as provided by the Council in the meeting are as follows: 

1. Nil GST is to be levied on essential medicines Amphotericin B used to treat Black Fungus disease, and Tocilizumab used as an antibody given to COVID-19 infected patients. Previously this rate was at 5%.
2. Anti-coagulants such as Heparin and the drug Remdesivir, used in treating COVID-19 have undergone a rate cut from 12% to 5%. The GST Council specified that “any other drug recommended by the Ministry of Health and Family Welfare and Department of Pharma” – shall also have a fixed rate of 5%.
3. Medical-grade Oxygen, Oxygen concentration and generation devices (including those imported for personal use), Ventilators and related equipment, BiPAP machines etc. have been given a reduced GST rate of 5% from the existing 12%. 
4. The GST rates on COVID-19 Testing Kits and Diagnostic Machines and Equipment have been cut down to 5% from the existing 12%.
5. Other specified COVID-19 relief materials such as Pulse Oximeters, Crematoriums, Furnaces, Temperature-check Equipment, Hand Sanitizers, etc. have been given a reduced GST rate of 5%.
6. GST rate on Ambulances have been reduced to 12% from the previously high rate of 28%. 

These reduced GST rates shall remain in force till September 30, 2021. 

The single-point agenda of the 44th GST Council Meeting provides great relief to taxpayers and consumers in reducing costs of essential commodities. However, the GST rate on COVID-19 Vaccines were not reduced from the existing 5% as it allows manufacturers to get the benefit of Input Tax Credit (“ITC”). The impact of this 5% GST rate on vaccines is envisioned to not burden the common man, as the Government shall be procuring and giving vaccines to the citizens for free.
 
Please find a copy of the Press Release here.

This update has been contributed by Ajay Sanwaria (Counsel) and Ritwika Pati (Associate). 

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