GST exemption on Covid drugs to make them costlier- Sitharaman

Finance minister Nirmala Sitharaman on Sunday said GST exemption to domestic supplies and commercial import of Covid drugs, vaccines and oxygen concentrators would make these items costlier for consumers as manufacturers would not be able to offset the taxes paid on inputs. Currently, domestic supplies and commercial imports of vaccines attract a 5 per cent Goods and Services Tax (GST), while it is 12 per cent in case of Covid drugs and oxygen concentrators. In fact, a nominal 5 per cent GST is in the interest of the domestic manufacturer of vaccine and in the interest of the citizens," Sitharaman said. The government has already exempted from customs duty import of a host of Covid-related relief materials, including Remdesivir injection and its APIs, Inflammatory diagnostic (markers) kits, medical grade oxygen, oxygen therapy related equipment such as oxygen concentrators, cryogenic transport tanks, etc, and Covid vaccines. Besides, effective May 3, the government exempted IGST on import of Covid-relief material received as donation for free distribution in the country, a move which helped speed up customs clearances of such imports. This exemption would be subject to nodal authorities, appointed by the state governments, authorising any entity, relief agency or statutory body, for free distribution of such relief material. The said goods can be imported free of cost by a state government or, any entity/ relief agency/ statutory body, authorized in this regard for free distribution anywhere in India.