The Goods and Services Tax Council has reduced the tax on medicines and hospital equipment considering the ongoing battle against COVID. Tax will not be charged for medicines, Tocilizumab and Amphotericin B, for treating black fungus.
The tax cuts are valid till September 30, 2021 which may be extended as per the situation. The decisions were made in the 44th GST Council meeting chaired by finance minister Nirmala Sitharaman.
However, a GST of 5% will be charged to Covid vaccines. While there is no tax cut on raw material for Covid testing kits, GST on Covid testing kits has been slashed from 12% to 5%. Specified inflammatory diagnostic kits like D-Dimer, IL-6, Ferritin, and LDH will also be charged at 5%.
The same changes have been applied to medical-grade oxygen, oxygen concentrator, personal import, ventilator, ventilator masks, Bipap machines, high-flow nasal cannula devices. However, items like RT-PCR machines, genome sequencing machines, and RNA extraction machines will continue to have an 18% tax. Genome sequencing kits will also continue to carry a tax of 12%.
GST for anticoagulant medicines like Heparin and Remdesivir has also been slashed from 12% to 5%. All drugs recommended by the Health Ministry for Covid treatment are to be charged a 5% GST.
A group of ministers had recommended the tax cut as the household economy was also affected by the nationwide economic slowdown prompted by the pandemic.
The finance minister said that the recommendations made by ministers have brought substantial change, and the council largely agreed to go with them, except for some slight tweaking. She added that the Centre will buy 75% of the vaccines as announced before and pay the decided GST for it.