The Goods and Services Tax (GST) Council, chaired by the Union Finance Minister Nirmala Sitharaman, on Saturday, approved all recommendations submitted by a Group of Ministers (GoM) on rate rationalisation of COVID-19 essentials and Black Fungus medicine.
The Goods and Services (GST) Council on Saturday decided to keep the GST on COVID-19 vaccines at 5 percent, with the centre sharing 70-71 percent of the GST collection with the states.
Finance Minister Nirmala Sitharaman chaired the 44th GST council meeting on Saturday, via video conferencing. Addressing the press briefing after the meeting, FM Sitharaman said the centre will buy 75 percent of the vaccine stock as announced earlier and will pay the GST too. But 70 percent of the GST income will be shared with the states.
And since vaccines will be free for consumers, they will not be burdened with added expenses, she added.
The council approved all the recommendations submitted by a Group of Ministers (GoM) -- constituted to deliberate tax rates -- on rate rationalisation of COVID-19 essentials and Black Fungus medicine, sources told CNBC-TV18.
The council stated that tax cuts are valid till September 30 and can be further extended as the deadline nears.
As per the recommendations, the council approved reducing GST to ambulances to 12 percent. The council also approved reducing GST on electric furnaces and temperature-checking equipment to 5 percent.
"The changes will be much appreciated by the general public as this is expected to reduce the cost of such critical Covid items for the end-user. On the topic of rate cute for COVID vaccines, the Council decided that since major vaccination is done by the government itself on a FOC basis, any change in GST rate was not required," Abhishek Jain, Tax Partner at EY said.
Notification of the reduced rates will be issued either today or tomorrow, Tarun Bajaj, Revenue Secretary told the press. The reduced rates on medicines will be applicable on the newly manufactured stock and not on the already available stock at pharmacies and chemists, he added.
The council also announced that 70 percent of the GST collections on all products, including COVID-19 essentials, will be shared with the states, government officials clarified.