Union Finance Minister Nirmala Sitharaman has hinted that there can be no exemption from GST on COVID-19 vaccines. 

She said that exemption of GST (Goods and Service Taxes) to domestic supplies and commercial import of COVID drugs, vaccines and oxygen concentrators would make these items costlier for consumers as manufacturers would not be able to offset the taxes paid on inputs. 

“If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price. 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 vaccine from GST would be counterproductive without benefiting the consumer,” Sitharaman tweeted. 

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Nirmala Sitharaman was responding to West Bengal chief minister Mamata Banerjee’s letter to Prime Minister Narendra Modi seeking exemption from GST and customs duty on oxygen concentrators, cylinders, cryogenic storage tanks and COVID related drugs from organisations or agencies. 

“In order to augment the availability of these items, government has also provided full exemption from basic customs duty and health cess to their commercial imports,” Sitharaman added.