India extends the date of lower tax rates on COVID medicines till December 31


Indian Finance minister Nirmala Sitharaman would extend the rebated GST rates on the COVID drugs until December 31, 2021. Earlier, the closing date was September 30.

GST Council defers the date of the reduced tax rate on medicines used in COVID-19 treatment till December 31

The 45th GST council meeting held on Friday, September 17 in Lucknow, directed by the Finance Minister, Nirmala Sitharaman, is the first bodily meeting since the COVID outbreak.

The last physical meeting took place on December 18, 2019. Since then, video-conferencing has come in handy.

All the state finance ministers except Gujarat attended the meeting to discuss the tax paradigm and other essential aspects.

Relief on the tax rate of several vital drugs

The GST council, moderated by the Finance minister, Nirmala Sitharaman, has decided to continue charging the discounted tax rate on COVID medicines such as Remdesivir and Tocilizumab till December 31, 2021.

Furthermore, other drugs used in the treatment of COVID-19, being Favipiravir, will be imposed 5 per cent lower tax rates till December 31.

Though, the accommodated GST on the medical instruments will terminate on September 30.

The council also decided to cut down the tax on Keytruda, a medicine used to treat cancer, by 5 per cent, which previously was 12 per cent.

Import of muscular atrophy drugs such as Zolgensma (for spinal muscular atrophy) and Viltepso (for Duchenne muscular atrophy) has been freed from GST, which came to crores.

The council has shelved IGST of 12 per cent on the import of these drugs.

Earlier this year, on June 12, the council announced the discounted tax rate on several COVID-19 medicines and medical equipment.

In addition to that, it also declared a tax waiver on the medicines treating black fungus.

Earlier, the tax rates imposed on monoclonal antibody Tocilizumab and Amphotericin B, medicines used for treating Black Fungus, was 5 per cent.

According to reports, the finance ministry’s revenue department claimed to have reduced the GST rates for 18 COVID-related supplies.

The council brought down the GST rate on other essentials such as gas, electric furnaces for crematorium including their installation, hand sanitisers and temperature recording appliances from 18 per cent to 5 per cent.

It also lowered the GST rate on the ambulance from 28 per cent to 12 per cent. However, a tax rate of 5 per cent on COVID vaccines will be abiding.

Raw material for COVID testing kits did not aid any tax concession.

The tax rate on some commodities, for instance, RT-PCR machines, RNA extraction machines, genome sequencing machines and pieces of equipment, will remain the same as before (18 per cent).

Tax rates on other goods and services

The GST council chose to impose a tariff of 5 per cent on food delivery platforms like Swiggy and Zomato, including cloud kitchens.

Food delivery apps to pay the taxes from January 1, 2022, in place of restaurants, leaving any additional charges on the consumer.

The decision taken will prevent tax evasion, claimed the council.

GST rate on biodiesel supplied to oil marketing companies for mixing with diesel has been lowered from 12 per cent to 5 per cent.

Taxes on rice kernels used for federal child development programs are also brought down to 5 per cent from 18 per cent.

Retro fitment kits for vehicles used by people with disabilities are supposed to pay 5 per cent taxes, and import of leased aircraft have also been excluded from the IGST.

The council has also decided to not put petroleum and diesel products under the bounds of GST yet describing it as the wrong time for imposing a tax on the same.

The excise imposed on certain luxury goods in addition to the GST for financing the remuneration amount for states will continue to charge till March 2026.

The government will use the collections to settle the debt for state compensation.

Nirmala Sitharaman also mentioned that two groups of state finance ministers would be established on rate rationalisation and using data to better adherence and block leakages.

Divya Shit
Divya Shit
Hi, I am an experienced content writer with an elaborate history of working in entertainment, health, technology, politics, and business. I did not choose this profession as much as this profession chose. I used to wonder what I was passionate about, never really got an answer until one day when a friend pointed out how much passion and energy I bring to the table when I write. I used to write for my school magazine and help my friends with their essay competitions; also, does journaling my entire life count? I don't believe in writing to achieve business goals, I love to write, and I put my soul into every piece I create; therefore, I choose topics that truly intrigue me. Being a writer, I understand how important it is to pen down the thoughts so that people reading them can honestly acknowledge your thought process. I work around that goal, and I try to help people tell the world their story excitingly and interactively.


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