In a response to West Bengal chief minister Mamata Banerjee's letter to Prime Minister Narendra Modi seeking exemption from GST on Covid related drugs and vaccines, Finance Minister Nirmala Sitharaman has said that GST exemption would make these items costlier.
The FM tweet that a 5 per cent GST rate ensures that the manufacturer is able to utilise ITC and in case of overflow of ITC, claim refund. Hence exemption to vaccines from GST would be counterproductive without benefiting the consumer.
Currently, domestic supplies and commercial imports of vaccines attract a 5 per cent Goods and Services Tax, while it is 12 per cent in case of Covid drugs and oxygen concentrators.