Congress seeks GST waiver on vaccines, Remdesivir, oxygen concentrators

A GST (Goods and Services Tax) waiver on vaccines, Remdesivir and oxygen concentrators can save ₹6000 crore for the State governments and individuals, the Congress on Wednesday claimed, reiterating its demand that the tax must be waived on all goods necessary to fight the COVID-19 pandemic.

Accusing the Union government of displaying “opportunism in crisis”, party spokesperson Gourav Vallabh, said the second wave of the pandemic was brought on people only because of the failure of the government. The GST collection by the Centre for two doses of vaccines for the entire population would come to ₹3000 crore. And as per the current rate of sales, nearly an equal amount of GST would be collected by the Centre on sale of Remdesivir and oxygen concentrators.

There is 5 per cent GST on vaccines and 12 per cent on Remdesivir and oxygen concentrators.

Also read: Centre can cut GST rates on COVID-19 vaccines, critical supplies, say experts

Quoting these calculations, Mr. Vallabh asked, “When the States and the citizens have such an enormous fight on their hands, why can’t the Centre waive GST for all essential COVID-19 related medical items? Is this the opportunity to be making money or providing relief to citizens?”

Nirmala’s explanation

Several Chief Ministers have requested the Centre to waive or reduce the GST rates on key medical items. In response to a latest request from West Bengal Chief Minister Mamata Banerjee, Union Finance Minister Nirmala Sitharaman in a long thread on Twitter said that any GST waiver would only contribute to increasing the cost of these products.

“If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price,” she stated.

Reacting to the Minister’s comments, Mr. Vallabh said that the tax on input should also be reduced. “Why can’t the Finance Minister call a meeting of the GST Council to hear from the State finance ministers,” he asked.

The pandemic had reached the rural areas, which kept the economy running in the first wave, he said. “Now along with unemployment, the disease has reached our villages. So I expect that the contraction in GDP in the first quarter of this financial year will be more than last year,” he added.