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Covid essentials get GST relief, but rift between Modi govt & Congress-ruled states persists

Punjab FM termed exclusion of Congress-ruled states from GoM that decided GST rate cuts on Covid goods as 'preposterous'. Sitharaman said groups not constituted on political affiliations.

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New Delhi: While the GST council announced a slew of tax cuts on essential Covid items Saturday, the rift between Congress-ruled states and the Narendra Modi government over the constitution of the Group of Ministers that recommended these cuts persists.

The group of state finance ministers, constituted on 29 May, included ministers from Maharashtra, Gujarat, Uttar Pradesh, Kerala, Goa, Meghalaya, Telangana and Odisha but no representative from purely Congress-ruled states was part of it.

The decision to slash the tax on Covid-related items was taken by the council based on the group’s recommendations, which were made on 8 June. In the meeting Saturday, the GST rates of several Covid essentials were reduced but the rate of only two items was brought down to 0 per cent.

The Congress and several other Opposition-ruled states had been demanding 0 per cent tax rates on all Covid-related items.

Lashing out against the composition of the GoM, Manpreet Singh Badal, Punjab’s finance minister, said that the exclusion of ministers from Congress-ruled states was “preposterous”.

In a tweet Saturday, Badal also noted that the council’s GoM should not act like a “Shahenshah (emperor)” in this once in a century crisis.

However, Finance Minister Nirmala Sitharaman refuted the allegations and said that the GST council constituted many GoMs and uniform representation was given to all states.

“Three Congress ministers said that in the future at least, you should consider having us in a GOM…Neither the inclusion nor the exclusion (into a GOM) happens on political party affiliations,” said Sitharaman at a press briefing after the meeting.

Also read: Medical bills and debt are bankrupting Indians already ravaged by Covid

GST levy on Covid relief items like oxygen, ventilator ‘insensitive’: Punjab FM

On Saturday, the GST council decided to levy a zero GST rate on two medicines — Tocilizumab and Amphotericin B — from the existing levy of 5 per cent.

Tocilizumab, an intravenous drug used to treat rheumatoid arthritis, has been found to reduce mortality in Covid patients while Amphotericin B is the key drug required to treat mucormycosis or black fungus.

The council also lowered taxes on items like oxygen, ventilators, oxygen concentrators, BiPAP machines, pulse oximetres and Covid testing kits to 5 per cent from 12 per cent. It further reduced the tax on hand sanitisers and furnaces in crematoriums to 5 per cent from 18 per cent.

However, in a Twitter thread, Badal questioned why GST was being levied on RT-PCR machines, furnaces for crematoriums and on Covid-19-related treatment invoices.

He also termed the taxes on oxygen, testing kits, ventilators and other items as “insensitive”.

The Congress minister also highlighted that the exemptions should not end on 31 August, as recommended by the GoM.

According to the finance ministry’s press release, the rate reductions and exemptions will remain in force till 30 September.

Even Delhi Deputy Chief Minister Manish Sisodia Saturday called for a complete GST waiver on Covid relief items.

In a tweet, Sisodia said that items like masks, sanitisers and oximetres have become part of every households’ needs, and are part of their monthly expenditure.

The government should not try to earn taxes through their sales, noted Sisodia, adding that “the Union government and other BJP state governments did not agree to make these items tax free in today’s meeting”.

Meanwhile, at the press conference, when Sitharaman was asked if the GST council decision was taken through a consensus, the finance minister said that the final decision on rate cuts was presented after discussions within the council.

Also read: Global economy to rebound strongly but emerging, developing nations will struggle: World Bank


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