Corona vaccines and medicines will be more expensive if GST is waived: Nirmala Sitharaman

- Finance Minister Nirma Sitharaman's clarification on tax exemption

- Five per cent GST on vaccines, 12 per cent tax on covid drugs and oxygen concentrators

New delhi date. 9

On the demand for GST waiver on covid vaccines, drugs and oxygen devices, Finance Minister Nirmata Sitaram said that if GST on these equipments is waived, it will be costly, as if GST is removed from it, manufacturers will not get ITC (input tax credit). And as a result the manufacturers will charge the amount of ITC from the customers. At present, a five per cent GST is levied on the domestic supply and import of vaccines and a 12 per cent tax on covid drugs and oxygen.

West Bengal Chief Minister Mamata Banerjee and Congress Acting President Sonia Gandhi have in recent days demanded that the Center waive GST and other duties on equipment including covid vaccines as well as medicines for treatment. In response, Nirmala told Sitaram today that the tax exemption would make the equipment more expensive.

Finance Minister Sitaram further said that if full exemption from GST is given, the amount of tax paid by vaccine manufacturers for raw materials will not be refunded as ITC and consequently this amount will be recovered from consumers as price hike. Vaccines are currently taxed at five per cent. So this tax ensures that manufacturers are getting input tax credit and refunds. Thus, if the tax is waived, it will have a side effect on consumers.