pri Waiver & Reduction of GST Rates for Covid Management Waiver & Reduction of GST Rates for Covid Management

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 :

  • Medicines and drugs
  • Medical grade oxygen
  • Oxygen generation plants, equipments etc
  • Covid testing kits
  • Sanitizers
  • Oximeters
  • Ventilators
  • Masks, canula, other equipments

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
A.     Medicines
1. Tocilizumab 5% Nil
2. Amphotericin B 5% Nil
3. Anti-Coagulants like Heparin 12% 5%
4. Remdesivir 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%
3. Ventilators 12% 5%
4. Ventilator masks / canula / helmet 12% 5%
5. BiPAP Machine 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%
2. Hand Sanitizer 18% 5%
3. Temperature check equipment 18% 5%
4. Gas/Electric/other furnaces for crematorium, including their installation, etc. 18% 5%
5. Ambulances 28% 12%

 *Vide Notification No. 5/2021-CT(Rate) dated 14.06.2021. Corresponding notifications in UTGST/IGST issued.

* Combined rate for both CGST and SGST /UTGST Act 2017.

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.

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  1. ANAND PRAKASH says:

    There is confusion among Manufacturer of “PSA Medical Oxygen Plant”. Some of manufacturer are charging 5% GST and some 18% on it.
    Manufacturer who are charging 5% GST are saying there is exemption of GST on Oxygen generator whilst Manufacturer who are charging 18% are telling there is not any clarity on “PSA Medical Oxygen Plant”. Recalling, PSA Oxygen Plant has been also used by various industries. Please clarify on the matter which is correct percentage.

  2. opjain02 says:

    The notfns issued by CBIC on 14.6.2021 are totally revenue oriented & are against the ratio decidendi of Delhi High court judgment in the case of Gurcharan Singh v. Ministry of Finance & Ors.(2021) J.K.Jain’s GST & VR 493, against which the Govt. has intentionally obtained stay in the case of Ministry of Finance (Deptt. of Revenue) v. Gurcharan Singh.(2021) J.K.Jain’s GST & VR 473 (SC).
    Om Prakash Jain s/o J.K.Jain, 9414300730

      1. OM PRAKASH JAIN says:

        Per notfn No. 05/2021-CT(R) dated 14.6.2021, the GST Rate on Covid-19 relief supplies has been reduced on various items from 14.6.2021 to 30.9.2021. But notfn is purposely silent for reduction/exemption of GST rates from March, 2021 to 13.6.2021. There are thousands of cases where Oxygen Concentrator were imported during the period from 1.3.2021 to 13.6.2021 on payment of 28%/12% IGST & gifted for personal use in the wake of covid pandemic, where the Govt. was under positive obligation to take ameliorative measures to protect and preserve the health of Citizens of India. The Govt. did no take any steps to exempt levy of exorbitant IGST levied on Citizens of India. Such step of the Govt. at the health cost of Citizens of India is against Article 14, Constitution of India
        CA OM Prakash Jain s/o J.k.Jain 9414300730

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