An exemption for vaccines from the GST would be counterproductive without benefit to the consumer, said Union Finance Minister Nirmala Sitharaman in a reply to a letter from CM Mamata Banerjee of West Bengal. In a series of tweets on Sunday, FM Sitharaman said the in CM Banerjee’s letter to PM Narendra Modi have already been exempted from customs and health taxes.
The Prime Minister of West Bengal has requested the exemption of oxygen concentrators and Covid-related drugs from customs / SGST / CGST / IGST. A large number of organizations, individuals and agencies have come forward to help the state government and are seeking these exemptions, she said in her letter.
Reply to the letter Union Minister Nirmala Sitharaman The Treasury Department published a list of items on May 3 this year that are exempt from GST, customs and other duties.
3 / Full Exemption from Tariffs, including IGST, is already available to ALL COVID relief supplies (not limited to one list) imported from @ IndianRedCross for free distribution in the country.@YEARS @PIB_India @PIBKolkata
– Nirmala Sitharaman (nsitharaman) May 9, 2021
“Full Customs Duty Exemption, including IGST, is already available for ALL COVID relief supplies (not limited to a list) imported by @IndianRedCross for free distribution in the country,” said FM Sitharaman. She added that remdesivir injections and API (active pharmaceutical ingredient) are also exempt from tariffs.
Half of the GST collection for an article goes to the following states: FM
She continues: “This exemption applies to all of the above goods when they are imported into the country free of charge for free distribution on the basis of a certificate issued by a state government by an institution, a state government, an aid agency or an autonomous organization.”
6 / Also for inflammatory diagnostic kits and reagents for COVID tests and COVID vaccines.@YEARS @PIB_India @PIBKolkata
– Nirmala Sitharaman (nsitharaman) May 9, 2021
However, the Union Finance Minister said the GST applies at 5 percent for vaccines and 12 percent for Covid-related drugs and oxygen concentrators for domestic shipments and the commercial import of those items. Half of the GST collection for an item goes to the center and half to the states, she said.
6 / Also for inflammatory diagnostic kits and reagents for COVID tests and COVID vaccines.@YEARS @PIB_India @PIBKolkata
– Nirmala Sitharaman (nsitharaman) May 9, 2021
“Another 41 percent of the CGST’s income goes to states. So of a collection of 100 rupees, 70.50 rupees is the state’s share,” said Minister Nirmala Sitharaman. Similarly, 41 percent of the GST collected with vaccines is passed on to states, which means states end up getting nearly 70 percent of total vaccine revenue, she adds.
A nominal GST of 5 percent is in the interests of the domestic vaccine manufacturer and in the interests of the citizens, said the Union’s finance minister, Nirmala Sitharman.
Unlock the entire chain of vaccine production / import GST: TMC MP
TMC MP Mahua Moitra said on Twitter that it was “not surprising” that the Union Finance Minister “found time to refute a 15-point counter-argument to what is essentially constructive feedback by the West Bengal CM”.
The center must add vaccines to the tariff-exempt Covid-19 aid list, Moitra said. She also asked, “Why does everything have to go through RedCrossIndia? Why just IGST? Why can’t citizens and hospitals even buy housewares without GST?”
10- I agree on paper, although the Center doesn’t have a good track record of paying states their dues. But as you can see – the suggestion was not made where only GoI should shoulder the pain. Our state will bear 70.50% of the costs.
– Mahua Moitra (@MahuaMoitra) May 9, 2021
She went on to say that the center could not manage the rest if states were willing to shoulder 70 percent of the revenue lost from exempting such items from tariffs.
“Please free the whole chain of vaccine production / import GST or make 0% if exemption is not an alternative,” Mahua Moitra appealed to Union Finance Minister NIrmala Sitharman.
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