{"id":297,"date":"2021-07-16T10:46:12","date_gmt":"2021-07-16T10:46:12","guid":{"rendered":"https:\/\/pkchopra.com\/blog\/?p=297"},"modified":"2024-03-12T10:16:07","modified_gmt":"2024-03-12T10:16:07","slug":"gst-on-covid-supplies","status":"publish","type":"post","link":"https:\/\/pkchopra.com\/blog\/index.php\/gst-on-covid-supplies\/","title":{"rendered":"GST on Covid Supplies"},"content":{"rendered":"

We all know that\u00a0the whole\u00a0<\/span>world including, India, is being adversely impacted by the Coronavirus pandemic and is fighting hard\u00a0to save lots of\u00a0<\/span>humanity. The medical warriors and frontline workers are leaving no stone unturned in treating covid patients and inventing vaccines.<\/p>\n

To defeat this virus,\u00a0we’d like\u00a0<\/span>an adequate supply of medical goods\u00a0like\u00a0<\/span>santizers, masks, drugs, healthcare facilities, and medical practitioners. Unfortunately, on one side,\u00a0there’s\u00a0<\/span>a shortage of essential goods required in COVID treatment. On\u00a0the opposite\u00a0<\/span>side, consumers and other stakeholders are demanding either a reduced rate or exemption from Goods\u00a0and repair\u00a0<\/span>Tax (GST) on\u00a0these things\u00a0<\/span>to form\u00a0<\/span>them affordable\u00a0accessible\u00a0<\/span>of affected persons.<\/p>\n

Presently, GST is levied at the following rates on various COVID related supplies:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Items<\/strong><\/td>\nGST<\/strong><\/td>\n<\/tr>\n
PPE Kits<\/td>\n18%<\/td>\n<\/tr>\n
Hand wash<\/td>\n18%<\/td>\n<\/tr>\n
Sanitizers Alcohol Based<\/td>\n18%<\/td>\n<\/tr>\n
Masks Cotton<\/td>\n05%<\/td>\n<\/tr>\n
Masks Other than cotton<\/td>\n12%<\/td>\n<\/tr>\n
Gloves<\/td>\n12%<\/td>\n<\/tr>\n
Vaccine<\/td>\n05%<\/td>\n<\/tr>\n
Ventilators<\/td>\n12%<\/td>\n<\/tr>\n
Medical Oxygen<\/td>\n12%<\/td>\n<\/tr>\n
Oxygen Concentrators<\/td>\n12%<\/td>\n<\/tr>\n
Oxygen Plants<\/td>\n18%<\/td>\n<\/tr>\n
Oximeter<\/td>\n18%<\/td>\n<\/tr>\n
Thermometer<\/td>\n18%<\/td>\n<\/tr>\n
Ambulance<\/td>\n28%<\/td>\n<\/tr>\n
Diagnostic Services<\/td>\nExempt<\/td>\n<\/tr>\n
Healthcare Services<\/td>\nExempt<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

However, Central Government has recently provided an ad-hoc exemption from charging essential\u00a0customs\u00a0<\/span>, Integrated Goods\u00a0and repair\u00a0<\/span>Tax (IGST), and health cess on importing COVID-related supplies in India. IGST has also been exempted on imported goods donated and distributed in India on a free-of-cost basis as a COVID relief.<\/p>\n

As a result of the exemption above, provisions concerning input tax credit availability has undergone the following change:<\/p>\n\n\n\n\n\n\n\n
Items<\/strong><\/td>\nITC (If used in business )<\/strong><\/td>\nITC (for donations)<\/strong><\/td>\n<\/tr>\n
Masks<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
Sanitisers<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
Gloves<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
PPE Kits<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If the demand of the people is adhered to by giving total exemption from GST on output supply of covid related goods, then, as a result, manufacturers of such goods\u00a0wouldn’t\u00a0<\/span>be\u00a0ready to\u00a0<\/span>depart\u00a0<\/span>their input credit taxes availed on purchase of raw materials. Hence covid related goods would be sold to\u00a0the top\u00a0<\/span>consumers at higher prices.<\/p>\n

Under the GST law, a registered person may claim a refund of any unutilised input\u00a0decrease\u00a0<\/span>at\u00a0the top\u00a0<\/span>of any tax period if zero-rated supplies are made without tax payment. But, no refund of the input\u00a0decrease\u00a0<\/span>are going to be\u00a0<\/span>allowed where the credit has accumulated on an inverted duty structure except on supplies of specified goods and services. An inverted duty structure arises when the\u00a0rate\u00a0<\/span>on inputs is\u00a0above\u00a0<\/span>the\u00a0rate\u00a0<\/span>on output supplies. As an alternate, if the GST rate is reduced on output supplies without a corresponding reduction\u00a0within the\u00a0<\/span>GST rate of raw materials purchased,\u00a0it might\u00a0<\/span>cause\u00a0<\/span>the buildup\u00a0<\/span>of enormous input\u00a0decrease\u00a0<\/span>again,\u00a0leading to\u00a0<\/span>a better\u00a0<\/span>price of such goods.<\/p>\n

Therefore, exempting all COVID-related raw materials and output supplies from charging GST\u00a0is that the\u00a0<\/span>need of the hour,\u00a0and therefore the\u00a0<\/span>refore the\u00a0<\/span>Goods\u00a0and repair\u00a0<\/span>Tax Council and the CG should take a pre-emptive decision on this.<\/p>\n","protected":false},"excerpt":{"rendered":"

We all know that\u00a0the whole\u00a0world including, India, is being adversely impacted by the Coronavirus pandemic and is fighting hard\u00a0to save lots of\u00a0humanity. The medical warriors and frontline workers are leaving no stone unturned in treating covid patients and inventing vaccines. To defeat this virus,\u00a0we’d like\u00a0an adequate supply of medical goods\u00a0like\u00a0santizers, masks, drugs, healthcare facilities, and …<\/p>\n","protected":false},"author":1,"featured_media":298,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":""},"categories":[11],"tags":[184,183],"_links":{"self":[{"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/297"}],"collection":[{"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=297"}],"version-history":[{"count":1,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/297\/revisions"}],"predecessor-version":[{"id":299,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/297\/revisions\/299"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/media\/298"}],"wp:attachment":[{"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pkchopra.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}