The 44th GST Council met on 12 June, 2021 for 44th time, just after a fortnight of its last meeting to consider and decide upon GST tax relief to goods and services being used in Covid-19 treatment and management. This is based on widespread public demand to do so for quite some time, though the Ministry of Finance had its own reasons not to do so. This meeting was convened solely for considering the recommendations of Group of Ministers (GoM) set up in 43rd Council meeting to recommend GST relief on goods and Services being used/ consumed in Covid treatment and management.
In its 44th meeting, GST Council decided to temporarily:
a) Remove / fully exempt GST on two medicines
b) Reduce GST rate on 15 items used in Covid treatment such as :
c) Reduce levy on ambulances
These relaxations shall be for the time being applicable upto 30th September, 2021, though the GoM had recommended the same till end of August, 2021. These relaxations shall be reviewed for continuity or otherwise when this term ends. The notifications to give effect have also been notified on 14 June, 2021 which come into immediate effect, i.e., w.e.f. 14.06.2021 till 30.09.2021.
However, GST @ 5 percent shall continue to be levied on Covid vaccines as it may not affect general public to a large extent as vaccines upto 75% are being provided for free to citizens and only 25% are available for a price. In such 75% cases, where free vaccine is being given, GST shall be applicable @ 5% but borne by the Central Government.
Table of new rates prescribed*
|S. No.||Description||Present GST Rate||GST Rate** recommended by GST Council / prescribed|
|3.||Anti-Coagulants like Heparin||12%||5%|
|5.||Any other drug recommended by Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatment||Applicable Rate
|B. Oxygen, Oxygen generation equipment and related medical devices|
|1.||Medical Grade Oxygen||12%||5%|
|2.||Oxygen Concentrator/ Generator, including personal imports thereof||12%||5%|
|4.||Ventilator masks / canula / helmet||12%||5%|
|6.||High flow nasal canula (HFNC) device||12%||5%|
|C. Testing Kits and Machines|
|1.||Covid Testing Kits||12%||5%|
|2.||Specified Inflammatory Diagnostic Kits, namely D-Dimer, IL-6, Ferritin and LDH||12%||5%|
|D. Other Covid-19 related relief material|
|1.||Pulse Oximeters, incl personal imports thereof||12%||5%|
|3.||Temperature check equipment||18%||5%|
|4.||Gas/Electric/other furnaces for crematorium, including their installation, etc.||18%||5%|
*Vide Notification No. 5/2021-CT(Rate) dated 14.06.2021. Corresponding notifications in UTGST/IGST issued.
In order to bring down costs on oxygen, oxygen generation equipments and related medical devices, the Council reduced GST on these items from 12% to 5%. These are medical grade oxygen, oxygen concentrator, oxygen generator concentrator, oxygen generator (including personal imports), ventilators, ventilator masks, canula (HFNC) device. GST rates on Covid testing kits and specified inflammatory diagnostic kits – D-Dimer, IL-6, Ferritin and LDH – have also been brought down from 12% to 5%. Other Covid-19 related relief materials have been also made cheaper. While GST on pulse oximeters (including personal imports) has been reduced from 12% to 5%, taxes on hand sanitizers, temperature check equipment, and gas, electric and other types of furnaces for crematorium, including their installation have been slashed from 18% to 5%. Relief is has been also given on purchase of ambulances by reducing GST on them from 28% to 12%.
Further, vide Notification No. 4/2021-CT(Rate) dated 14.06.2021, rate of GST on supply by way of construction, repairs, renovation, maintenance or alteration etc of a structure meant for funeral, burial or cremation of deceased has been reduced from 12% to 5% (i.e. 2.5 CGST, 2.5% SGST / UTGST). This shall be effective from 14.06.2021 to 30.09.2021.
While the GST rate reduction / waiver will bring down the prices to the extent of tax rate for end users, manufacturers may not be able to set off input tax credit to the full extent and where GST rate has been made zero / nil, no input tax credit may be available. Infact it would create a dilemma for the businesses as cost may actually not come down to the extent of GST reduced or waived but market would expect such price cut. This is because of no input tax credit available to such businesses where output is exempt Nevertheless, such reduction is a welcome step in present situation crippled with covid pandemic.