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Nirmala Sitharaman Explained GST Removal From COVID Vaccines Can Increase Its Cost

Nirmala Sitharaman Mamata Banerjeevia
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Finance Minister Nirmala Sitharaman on Sunday dismissed the removal of GST on corona vaccine, medicines, and oxygen concentrators. She said that the removal of GST would make these life-saving medicines expensive for buyers.

 

Reason Why GST Can’t Be Removed

GST
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Nirmala Sitharaman explained the reason why GST can’t be removed. She told after removing GST, the manufacturer will not get the benefit of input tax credit for the tax paid on raw and intermediate goods and materials used in production. Currently, GST is levied at the rate of 5 percent on the domestic supply of vaccines and commercial exports. At the same time, GST is applicable at 12 percent on COVID medicines and oxygen concentrators.

 

Exemption In Tax Will Increase Burden On Public

Nirmala Sitharaman
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Sonia Gandhi and Mamata Banerjee have demanded a tax exemption on COVID vaccines and medicines.  Responding to the demand for exemption from GST on these goods, Nirmala Sitharaman said, If the total 5% discount is given on the vaccine, then the vaccine manufacturer will not get an input tax credit for the tax paid on the raw material. There will be no profit, and the manufacturer will recover the entire cost from the customers. By applying GST at the rate of 5%, the manufacturer gets the benefit of Input Tax Credit (ITC) and can claim a refund if ITC is more. Therefore, the exemptions from the GST to the vaccine manufacturer will harm the consumers.

In a series of 16 tweets, Nirmala Sitharaman explained why GST couldn’t be removed from COVID vaccines and medicines. Below are the tweets.

Currently, India is fighting with the second wave of coronavirus. Every day the cases are increasing. Always wear masks, maintain social distancing and keep sanitizer. The vaccination has started for above 18, register yourself and get the vaccination done.

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Praneet Samaiya
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