New Delhi: As the Finance Minister, Nirmala Sitharaman is schedule to chair Goods and Services Tax (GST) Council later today, to discuss additional tax relief on medical supplies needed in prevention and treatment of the coronavirus disease, here are few points that are expected from today’s meet,
GST on Coronavirus vaccines
Vaccine issue has been a matter of debate between central and state governments. While, Centre has agreed to supply covid vaccines free of cost to states from June 21 – exempting states from 5% tax burden on vaccine procurement – today’s meet will discuss tax applicable on vaccines procured by private hospitals. Union finance minister Nirmala Sitharaman had explained the technical difficulties in removing the 5% GST on covid vaccines, saying it could be counter productive to consumers. But opposition states argue that the Council should consider this relief given that it is a once-in-a century pandemic.
GST on medical oxygen and related Covid gears
The Council is also likely to discuss tax relief on medical oxygen and related gear, pulse oximeters and covid testing kits. While the Centre is prepared to lower the rate to 5% from 12% on these items, the demand from opposition-ruled states is to remove taxes entirely on all medical items needed in covid management. Meanwhile, a 5% tax rate – called the ‘merit rate’ – is usually applicable on essential supplies. A panel of central and state government officials which examined tax relief proposals had earlier preferred a 5% tax rate for these medical supplies.
GST on Medical equipments
The GST Council has also received suggestions for tax relief on equipment used by hospitals and ambulances during the pandemic. But it remains to be seen if there would be any change in the tax rates given that these are used by institutions and policy makers are unsure the benefits of a tax cut will be passed on to consumers.
GST on relief to small businesses
Small business set-ups expect a facility for quarterly tax payment but now, they have the flexibility to file tax returns on a quarterly basis but have to pay taxes every month. A panel of officials were earlier asked to work out details of a scheme to allow quarterly payments. There are many other structural issues of GST to be discussed including GST compensation to states beyond 2022 but it is unlikely to taken up in today’s half-day meet.