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Non-BJP ruled states want GST exemption on COVID vaccines

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Ahead of the Goods and Services Tax (GST) council meeting on Friday, non-BJP ruled states held a virtual meeting on the issue of taxation on COVID-19 vaccines. The states decided to ask the Centre for zero taxation on COVID vaccines.

Rajasthan Chief Minister Ashok Gehlot, who also holds the finance portfolio, deputed urban development minister, Shanti Dhariwal for the meeting. It was also attended by finance ministers of West Bengal, Punjab, Jharkhand, Chhattisgarh, Kerala and Tamil Nadu.

Dhariwal, who represents the state in the GST council, urged all finance ministers to remain united on the issue of total exemption of GST on COVID-19 vaccines and other medicines and equipment related to COVID care.

During the meeting, Rajasthan raised the issue of release of all outstanding GST compensation to the states at the earliest. Notably, the states are combating financial crunch because of the slowdown in the economy and poor revenue collections amid the pandemic. The six states also decided to demand a 15 per cent increase on additional lending limits.

Mamata Banerjee demanded GST exemption

As of now, GST on COVID-19 related items varies between 5-12 per cent. On May 9, West Bengal Chief Minister Mamata Banerjee wrote to Prime Minister Narendra Modi demanding a GST exemption for vaccines and other COVID relief material.

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But, the Union finance minister Nirmala Sitharaman opposed the complete GST exemption. Sitharaman, in one of her tweets, had then said, “If full exemption from GST is given, vaccine manufacturers would not be able to offset their taxes paid on their inputs and input taxes and would pass them on to the end consumer/citizen by increasing the price.”

Other states like Punjab, Chhattisgarh and Delhi have already called for GST Council meetings to discuss these issues.

 

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