Sitharaman responds after Mamata asks Modi to waive vaccine taxes
The 5% tax on COVID-19 vaccines and 12% tax on medicines and oxygen concentrators is required to keep costs low, Union Finance Minister Nirmala Sitharaman said on Sunday. Sitharaman was responding to West Bengal Chief Minister Mamata Banerjee's letter to Prime Minister Narendra Modi seeking a waiver on all forms of taxations and customs duty on medical equipment and drugs used to treat COVID-19.
'Producers would be unable to offset taxes paid on inputs'
Sitharaman tweeted, "If full exemption from (Goods & Services Tax) were given, the domestic producers of these items would be unable to offset taxes paid on their inputs and input services and would pass these on to the end consumers by increasing their price." Manufacturers can claim input tax credit on tax paid on raw materials/services used to make their products, making them cheaper.
You can view Sitharaman's tweet here
16/ A 5% GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund.— Nirmala Sitharaman (@nsitharaman) May 9, 2021
Hence exemption to vaccine from GST would be counterproductive without benefiting the consumer.@ANI @PIB_India @PIBKolkata
Donors have approached states to waive taxation: Banerjee
In a letter to Modi on Sunday, Banerjee said, "A large number of organizations, individuals and benevolent agencies have come forward to donate oxygen concentrators, cylinders...containers...and COVID-related drugs." The CM said, "Many of the donors have approached the state government to consider exemption of these from customs duty, SGST (State GST), CGST (Central GST), IGST (Integrated GST)."
Contribute towards effective management of COVID pandemic: Banerjee
Banerjee hence requested a waiver on taxations and customs duty "to help remove supply constraints of the above-mentioned life-saving drugs and equipment and contribute towards effective management of COVID pandemic." This was Banerjee's third letter to Modi regarding the COVID-19 situation in India since being sworn in as CM for a third term on Wednesday.
India reports over 4 lakh new cases; 4K deaths
According to the Union Health Ministry, till Sunday morning, India reported a total of 2,22,96,414 COVID-19 cases. The death toll has reached 2,42,362. Since the beginning of the pandemic, 1,76,12,351 patients have recovered, while 37,36,648 cases involve active infections. In the past 24 hours alone, India recorded 4,03,738 new infections and 4,092 fresh fatalities. 16,94,39,663 vaccine doses have been administered so far.