Agenda Keyword
Confidential
Agenda for the 44th Meeting
of
the GST Council
12th June 2021
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GST Council Secretariat
New Delhi
Dated: 09th June 2021
Notice for the 44th Meeting of the GST Council Scheduled on 12th June 2021
The undersigned is directed to refer to the subject cited above and convey that the 44th
Meeting of the GST Council would be convened on 12th June 2021 (Saturday) through Video
Conference. The schedule of the meeting is as follows:
12th June 2021(Saturday) : 1100 Hours onwards
2. Please convey the invitation to the Hon’ble Members of the GST Council to attend the
Meeting.
Sd-
(Tarun Bajaj)
Secretary to the Govt. of India and ex-officio Secretary to the GST Council
Tel: 011 23092653
Copy to:
1. PS to the Hon’ble Minister of Finance, Government of India, North Block, New Delhi with the
request to brief Hon’ble Minister about the above said meeting.
2. PS to Hon’ble Minister of State (Finance), Government of India, North Block, New Delhi with the
request to brief Hon’ble Minister about the above said meeting.
3. The Chief Secretaries of all the State Governments, Union Territories (with legislature) of Delhi,
Puducherry and Jammu and Kashmir with the request to intimate the Minister in charge of
Finance/Taxation or any other Minister nominated by the State/UT Government as a Member of the
GST Council about the above said meeting.
4. The Chairman, CBIC, North Block, New Delhi, as a permanent invitee to the proceedings of the
Council.
5. The Chairman, GST Network
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TABLE OF CONTENTS
Agenda
No.
Agenda Item Page No.
1 Report of the Group of Ministers for GST Concessions on Covid Relief Items 7-26
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Discussion on the Agenda Item
Agenda Item: Report of the Group of Ministers for GST Concessions on Covid Relief Items
The 43rd Meeting of the GST Council was held on 28th May 2021. An Agenda Item dealing
with the representations/recommendations received from States, Ministries and other stakeholders
(trade and individuals) seeking reduction/exemption in GST rates on items being used for Covid-19
relief was placed before the Council. These representations/ recommendations were broadly classified
under two categories as under, -
A. Requests for enhancement of the scope of Ad hoc Exemption Order No. 04/2021-Customs
dated 03.05.2021 for Covid-19 relief goods received even on purchase basis from abroad for
free distribution in India; and
B. Requests for reduction in GST rates on Covid-19 related individual items like drugs, vaccines,
oxygen therapy equipment like concentrators and other goods/equipment like kits, PPE, mask,
sanitizer, ventilators etc.
Further, certain petitions for relief from GST on Covid-19 related items, including personal imports of
oxygen concentrators, were also brought to the notice of the Council.
2. The Council in the said meeting took the following decisions relating to changes in GST rates
on Covid relief items, -
a. With regard to import of specified Covid-19 relief goods covered under the Ad hoc
exemption, these were recommended for full exemption from IGST, even if imported on
payment basis, for donating to the government or on recommendation of state authority to any
relief agency.
b. Both the Ad hoc exemption and the IGST exemption to goods imported on payment basis for
donation were made effective till 31st August 2021.
c. Further in view of rising Black Fungus cases, the medicine “Amphotericin B” was included in
the above stated exemption (i.e., when imported for free distribution in India). Additionally,
Central Government also exempted Customs duty on Amphotericin B.
d. As regards GST rates on individual items being used in Covid-19 relief there were divergent
views in the Council as regards coverage, extent and modalities of GST
concession/exemption. Therefore, it was decided to constitute a Group of Ministers (GoM) to
go into the need for further relief to COVID-19 related individual items immediately. It was
also decided the GoM shall furnish its report by the 8th June, 2021.
3. It is pertinent to mention here that the recommendations mentioned at (a) to (c) of para 2.2
above have since been implemented by the Central Government with effect from 31st of May 2021
[Notification Nos 31/2021-Cus, 32/2021-Cus and Ad hoc Exemption Order No. 05/2021 all dated
31.05.2021 refer].
4. As directed by the Council, a Group of Minsters (GoM) was constituted with Sh. Conrad K.
Sangma, Hon’ble Chief Minister of Meghalaya as the convenor. As per the Terms of Reference, the
GoM was entrusted to examine and make recommendations on the need for GST concession/
exemption on, -
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a. COVID vaccines, drugs and medicines for COVID treatment, and testing kits for COVID
detection,
b. Medical grade oxygen, Pulse Oximeters, Hand sanitizers, Oxygen therapy equipment such as
concentrators, generators and ventilators, PPE kits, N95 masks, surgical masks, temperature
checking equipment, and
c. Any other items required for COVID relief.
5. The GoM held its first and only meeting on 3rd June 2021 and has submitted its report for the
Council’s consideration (Annexure-I). Accordingly, the report of the GoM is placed before the
Council for consideration and taking a decision as appropriate.
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Annexure-I
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Contents
S.
No.
Description
Page
No.
1. Context 11
2. Decisions of the GST Council 11
3. Group of Ministers (GoM) and its Terms of Reference 12
4. Recommendations of the Fitment Committee 12
5. Discussions by the GoM 14
6. Recommendations of the GoM 17
7. Appendices
Annexure A
Office Memorandum containing details of members of
the GoM and its Terms of Reference
19
Annexure B
Agenda Item 11(i) for the 43rd Meeting of the GST Council -
Covid-19 related recommendations by the Fitment Committee
21
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1. Context
During April-May 2021, the country witnessed a sharp surge in the number and severity of
COVID-19 cases. In this context, various stakeholders made representations/references/
recommendations to the Central and State Governments to grant tax concessions to COVID-19 relief
material, in order to augment supply for better management of the crises caused by the pandemic.
1.1 By way of background, during the initial COVID-19 wave in April 2020, the Central
Government had exempted certain goods, namely ventilators, face masks, personal protection
equipment (PPE), COVID-19 testing kits and their inputs from Basic Customs Duty (BCD) and
Health Cess for a limited period [Notification No. 20/2020-Customs dated 9th April, 2020 refers].
No concession from GST (including IGST on imports) on such COVID-19 related goods was
however granted at that time.
1.2 In the midst of the ‘second wave’ of the pandemic during April and May 2021, based on the
requests for tax concessions on COVID-19 relief material, the Central Government allowed
exemption from Basic Customs Duty and Health Cess on a number of items, including Remdesivir
medicine, medical oxygen and oxygen generation and transportation equipment and COVID-19
vaccines. [Notification Nos. 27/2021-Cus to 30/2021-Cus refers]. In addition, to address the needs
arising out of prevailing exceptional circumstances, an Ad hoc Exemption Order No. 4/2021-Customs
dated 3rd May 2021 was issued, allowing full IGST exemption on specified COVID relief materials
like medical oxygen, oxygen concentrators and other oxygen storage and transportation equipments,
certain diagnostic markers test kits and COVID-19 vaccines, on such goods, when imported free of
cost for free distribution, subject to certain conditions for a limited period. There were also requests to
extend this exemption to even such items which were purchased from outside India for donation to
State for free distribution.
1.3 In certain cases, petitions were also filed before Hon’ble High Courts for seeking a direction
for GST exemption on items like oxygen concentrator, their import as gift and import of medicines
like Amphotericin B. In some cases, GST exemption was allowed by the Courts.
1.4 The requests/references for GST concession on various Covid relief items were referred to the
GST Council after detailed examination by the Fitment Committee.
2. Decisions of the GST Council
The 43rd Meeting of the GST Council was held on 28th May 2021. An Agenda Item dealing
with the ibid representations/recommendations received from States, Ministries and other stake
holders (trade and individuals) seeking reduction/exemption in GST rates on items being used for
Covid-19 relief was placed before the Council. These representations/recommendations were broadly
classified under two categories as under: -
A. Requests for enhancement of the scope of Ad hoc Exemption Order No. 04/2021-Customs
dated 03.05.2021 for Covid-19 relief goods received even on purchase basis from abroad for
free distribution in India; and
B. Requests for reduction in GST rates on Covid-19 related individual items like drugs, vaccines,
oxygen therapy equipments like concentrators and other goods/equipments like kits, PPE,
masks, sanitizers, ventilators etc.
Further, certain petitions for relief from GST on Covid-19 related items, including personal imports of
oxygen concentrators, were also brought to the notice of the Council.
2.1. The GST Council in its 43rd meeting held on 28th May 2021 took the following decisions
relating to changes in GST rates on Covid relief items: -
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A. With regard to import of specified Covid-19 relief goods covered under the Ad hoc
exemption, these were recommended for full exemption from IGST, even if imported on
payment basis, for donating to the Government or on recommendation of state authority to
any relief agency.
B. Both the Ad hoc exemption and the IGST exemption on goods imported on payment basis for
donation were made effective till 31st August 2021.
C. Further in view of rising Black Fungus cases, the medicine “Amphotericin B” was included in
the above stated exemption (i.e., when imported for free distribution in India). Additionally,
the Central Government also exempted Basic Customs duty on Amphotericin B.
D. Regarding GST rates on individual items being used in Covid-19 relief, there were divergent
views in the Council with respect to its coverage, extent and modalities of GST
concession/exemption. Therefore, it was decided to constitute a Group of Ministers (GoM) to
examine the need for further relief on COVID-19 related items immediately. It was also
decided that the GoM shall furnish its report by 8th June, 2021.
2.2. It is pertinent to mention here that the recommendations mentioned at A to C of para 2.2
above has since been implemented by the Central Government with effect from 31st of May 2021
[Notification Nos 31/2021-Cus, 32/2021-Cus and Ad hoc Exemption Order No. 05/2021 all dated
31.05.2021 refer].
3. Group of Ministers (GoM) and its Terms of Reference
As directed by the GST Council in its 43rd Meeting held on 28th May 2021, a Group of
Minsters (GoM) was constituted under the Chairmanship of Sh. Conrad K. Sangma, Hon’ble Chief
Minister of Meghalaya. The constitution of GoM is at Annexure A.
3.1. As per the Terms of Reference, the GoM was entrusted to examine and make
recommendations on the need for GST concession/ exemption on: -
a) COVID vaccines, drugs and medicines for COVID treatment, and testing kits for COVID
detection,
b) Medical grade oxygen, Pulse Oximeters, Hand sanitizers, Oxygen therapy equipment such as
concentrators, generators and ventilators, PPE kits, N95 masks, surgical masks, temperature
checking equipment, and
c) Any other items required for COVID relief.
4. Recommendations of the Fitment Committee
Before going into detail of the GoM discussions and its recommendations, it is pertinent to
discuss the recommendations that the Fitment Committee had made to the GST Council on these
items. The Fitment Committee in its meeting on 20th May 2021 had, amongst other agenda, also
examined in detail the requests/recommendations received from various Ministries, States and other
stakeholders on GST concessions/exemption on individual items like vaccines, drugs, medicines and
other goods/equipments being used in Covid-19 management.
4.1. While examining these representations, the Fitment Committee was broadly of the view that
while there is need for providing relief by way of GST concessions for identified Covid-19 items,
following aspects relevant to such decision making need consideration: -
(i) Relief may be considered only by way of rate reduction
(ii) Upfront exemption on manufactured goods is not desirable as exemption adversely impacts
domestic manufacturing
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(iii) The general lowest rate of GST is 5%. Therefore, on merit, 5% rate may be considered where
concession is to be granted. Any special lower rate than 5% may not be opted, since 5% is a
nominal rate, and the lowest standard rate, applicable to other lifesaving medicines.
(iv) The purchase of goods by the Government may not require exemption as cost is paid by the
Governments and Tax also comes back to Government.
(v) GST concessions should essentially be considered on those items which are critical and
procured by patients.
(vi) Zero rating of items for domestic consumption is not permissible in law.
4.2. The Fitment Committee had recommended reduction of GST rate from 12% to 5% on the
following items for a period of two to three months:
(i) Oxygen concentrator/generator
(ii) Pulse oximeter
(iii) Medical grade oxygen
(iv) Covid testing kits.
The Fitment Committee had also viewed that the concessions on medicines may be considered on the
recommendation of Ministry of Health/Pharma.
4.3. On other items, the Fitment Committee recommended no change in rates. The
recommendations of the Fitment Committee, on individual items, are summarized as below: -
S.
No.
Description of Goods
Present
GST Rate
(%)
GST Rate recommended
by the Fitment
Committee (%)
A. Items where GST rate reduction recommended by the Fitment Committee
1. Medical Grade Oxygen 12% 5% till 31.07.2021
2. Oxygen Concentrators/generator 12% 5% till 31.07.2021
3. Pulse Oximeters including personal imports 12% 5% till 31.07.2021
4. Covid Testing Kits 12% 5% till 31.08.2021
B. Items on which no change in GST rate was proposed by the Fitment Committee
1. Vaccine 5% No change
2. Drugs and medicines 5% / 12% Change only on recom-
mendation of Ministry of
Health
3. PPE Kits 5% No change
4. N95 masks/ triple layer masks, Surgical masks 5% No change
5. Ventilators 12% No change
6. Hand sanitizers 18% No change
7. Temperature check equipment 18% No change
8. Ambulances 28% No change
9. Portable Hospital Units 18% No change
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10. Raw materials for manufacture of Covid Testing Kits Applicable
Rate
No change
11. RT PCR machines 18% No change
12. RNA extraction machines 18% No change
13. Genome sequencing kits and machines 12% / 18% No change
14. Specified Inflammatory Diagnostic Kit namely D-
Dimer, IL-6, Ferritin and LDH
12% No change
(Detailed recommendations of the Fitment Committee are at Annexure B)
5. Discussions by the GoM
The meeting of the GoM was held on the 3rd June 2021 via Video Conference. The GoM held
elaborate discussions on each individual item required for Covid-19 relief. Keeping in mind the
urgency and importance of the matter, the GoM while deliberating on each item at length, made extra
efforts to conclude the discussion in one sitting only, which lasted long.
5.1. While examining all the issues, the general sense of the house was that the recommendations
of the GoM need to be made, considering the broader context of providing relief by way of reduction
of GST rates on items, which are directly procured by the public at large. At the same time, the kind
of impact these recommendations may have on the domestic manufacturing, need to be taken into
account. The GoM felt that the creation of domestic capacity in short and intermediate run is the key
to tackle the pandemic crisis. The GoM also analysed the impact of any change in tax rates on the
demand and supply sides, eventual impact on the consumers, revenue streams of the Governments and
possible long-term implications of such recommendations made on the GST architecture and taxation
structure across all sectors of the economy. Further, it was the endeavour of the GoM to arrive at its
recommendations through consensus.
5.2. Option of Zero rating and 0.1% rate: The issues of zero rating and 0.1% rate were debated
extensively in the Council while exploring the most optimal way for providing much needed relief to
the masses in these difficult times. Needless to say, that these issues were discussed in equal earnest in
the GoM too. Eventually, the GoM was guided by the reasoning that more than anything else, the
recommendations of the GoM should benefit the people/common man of this Country (who are
braving the pandemic) the most, while also ensuring that our domestic producers and supply chains do
not suffer.
5.2.1 Option of Zero rating: Detailed discussion was held in the GoM meeting on the issue of zero
rating of Covid-related goods. The GoM took careful note of the fact that the GST law at present, in
terms of a conscious decision of the GST Council, does not allow zero rating of supplies, other than
export of goods and services or supply of goods or services to a Special Economic Zone developer or
unit. The Council has, in all these years, not yielded to any request to zero rate a domestic supply and
did not make recommendation to change the provisions concerning zero rating, even though there
have been consistent demands to extend zero rate to various supplies. Any amendment in the law of
this nature will have wider implications and therefore, a cautious approach needs to be taken, was the
view of the GoM. In any case, amendment in law, even if agreed to, would take a long time, since it
requires significant changes in CGST, SGST and IGST Act and time is of the essence in handling the
pandemic crisis. Therefore, granting immediate short term relief of zero rating would not be feasible.
5.2.2. Option of 0.1% rate: The GoM examined this issue at length, specifically going into details
on its implications to the Industry. In this context, the GoM also enquired in detail on the experience
of cases, where 0.1% rate had been recommended earlier by the Council. The GoM took note of the
fact that the option of providing a lower rate of GST of 0.1% in the case of supplies to merchant
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exporters was done as a matter of exception in the initial roll out period of GST, as the refund of
exporters got stuck due to system-related issues. The 0.1% rate was prescribed only on supplies which
were eventually to be zero rated (i.e., exports). Further, 0.1% rate was an interim measure for export
supplies and was an optional rate. It applied to any domestic supply of goods made to the merchant
exporters subject to certain conditions and restrictions. The goods so supplied were required to be
dispatched directly to the port and to be exported within 90 days. Therefore, the 0.1% rate was
provided in the spirit of zero rating of exports and to facilitate exports. However, as per the available
information, 0.1% rate is availed by a small percentage of those cases who are eligible to claim. The
GoM was informed that 0.1% only enables refund of accumulated Input Tax Credit (ITC) as is
allowed for inverted rate supplies. This means that with 0.1% rate, domestic manufacturer would only
be eligible for refund of ITC on inputs and he does not get refund of ITC on input services or input
capital goods. Therefore, domestic manufacturer supplying goods at 0.1% rate would be stuck up with
ITC on input services and capital goods, while imports will have no such burden. Also with 0.1% rate,
the need of claiming refund of accumulated ITC on inputs for domestic manufacturer gets
accentuated. Hence, 0.1% rate on supplies to the merchant exporters, being the optional rate is being
availed only in a few cases.
5.2.3. The GoM noted that while the ongoing pandemic was unprecedented in nature, however,
0.1% rate does not really help, as discussed above, and in fact, a mandatory 0.1% rate would impact
domestic manufacturing adversely. Further, it creates another rate for domestic supply which in longer
run, becomes a precedent for seeking such relief by others on various counts, even though such a rate
only deepens the inverted rate structure and not really beneficial to anyone, except importers.
Accordingly, the GoM felt that option of 0.1% rate may not be exercised for covid relief supplies,
more so considering it to be a short-term measure.
5.3. Vaccine: The GST rate on vaccine has been the one of the most contentious issue. The GoM
examined the issue with utmost care, minutely exploring all options. Apart from the proposals for zero
rating or lower rate like 0.1% as discussed in the preceding paras, the GoM also discussed in detail the
proposal for fully exempting GST on vaccine or providing a differential rate structure for vaccine
procurements by Centre, State and private parties. After exhaustive deliberations on the issue, the
GoM strongly felt that having a multiple tax rate structure for vaccine for different levels of
procurement is not feasible, and also taking into account an extremely relevant aspect that the vaccine
is mostly procured (around 90%) by the Central and State Governments, who supply it to the people
mostly free of cost, any GST reduction will not have direct benefit for the people (who are getting it
free of cost anyway), or Government (as GST paid by the Government comes back to it as tax revenue
and the States Government getting 70% share) or the manufacturer. Thus, change in GST rate on
vaccine will have no visible impact on demand or supply or the consumer. In fact, an exemption or a
levy of 0.1% rate would only affect the domestic manufacturers adversely. It was also noted that as
per the decision of the GST Council, import of Covid-19 vaccines for free distribution, even if
imported on payment basis, has been exempted from basic customs duty and IGST till 31.08.2021,
which can be further extended, if need arises. Accordingly, the GoM did not recommend any change
in the GST rate on vaccines.
5.4. Medicines: With regard to medicines, the GoM was of the view that unlike vaccines, the cost
of medicines being used in Covid-19 treatment, in majority of the cases, is borne directly by the
patients. Further, the GoM also took note of the fact that certain medicines used in Covid-19 treatment
were expensive and hence reduction in GST rates merit due consideration. The issue of amphotericin
B, as arising from Court matter, where Hon’ble High Court allowed, in the interim, relief by allowing
the imports without payment of IGST, till the time matter was decided by the Government, was also
placed before the GST Council in the meeting held on 28.5.2021. Detailed discussions were also held
on the prices and availability of certain critical drugs like Amphotericin B, Tocilizumab and taking
into cognizance the fact that at present, Tocilizumab is almost entirely imported and Amphotericin B
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is also significantly imported (thus exemption for a short period may not have unintended impact like
ITC blockage), the GoM recommended full exemption of GST on these two drugs till 31st August
2021. The GoM was convinced that domestic capacity needs to be created in these medicines and
hence, GST exemption on these may not be extended beyond 31st August 2021, to avoid making
unnecessary dent on the domestic efforts for creating the capacity. As regards other medicines, the
GoM also recommended that for other drugs like Remdesivir, Heparin and similar anti-coagulant
medicines, GST rate be reduced from 12% to 5%. Further, any other drug/medicine recommended by
the Ministry of Health and Family Welfare (MOHFW) or Department of Pharmaceuticals, used in
Covid treatment, on which current GST rate is 12%, may be reduced to 5% till 31st August 2021.
5.5. Oxygen Therapy equipments and other devices: With regard to GST rates on oxygen
therapy goods/equipments being used for Covid management, the GoM was in agreement with the
recommendations of the Fitment Committee for reduction in GST rates from 12% to 5% on Medical
Grade Oxygen, Oxygen Concentrators and Pulse Oximeters, including personal imports thereof. The
GoM was of the view that the period of these concessions should be uniform for all items and limited
to 31st August 2021.
5.6. Other essential medical devices [ventilators, ventilator masks/canula/ helmet, BiPAP
Machine and high flow nasal canula (HFNC)]: In addition to items mentioned at para 5.6 above,
the GoM was of the view the medical devices, namely, ventilators, ventilator masks/canula/ helmet,
BiPAP Machine and high flow nasal canula (HFNC) were also critical for Covid-19 management.
Accordingly, the GoM recommended a tax rate reduction on these items to 5% till 31st August, 2021.
5.7. Hand sanitizers and Temperature check equipment: While deliberating on the sanitizers at
length, the GoM felt that any exemption for a longer period may impact the competing goods, but in
the present exceptional circumstances, exemption for a shorter period on sanitizers is merited. Upon
detailed discussions on the requirement and application of these items, the GoM recommended
reduction in GST rate on hand sanitizers from 18% to 5% and on temperature check equipment from
18% to 12% till 31st August, 2021.
5.8. Covid testing kits and other testing kits (D-dimer, IL6, Ferritin and LDH): The testing
kits, including for markers like D-Dimer, etc., are essential items for dealing with Covid and it was
felt that there is a need for extending GST concession on all these items. GoM agreed with the
recommendation of Fitment to reduce GST rate to 5% on Covid testing Kits. However, on the other
kits, the Fitment Commitment had not recommended any rate change. The GoM observed that the kits
for marker tests are quite essential and deserve tax relief. Accordingly, the GoM recommended GST
reduction to 5% on texting kits for d-dimer, IL-6, Ferritin and LDH till 31st August, 2021.
5.9. Gas/Electric/other Furnaces for crematorium: The need for reduction of GST rate on these
items was raised by one of the members in the GST Council in its meeting held on 28th May 2021.
The GoM noted that in the present pandemic situation, there is a felt need for providing GST relief on
Gas/Electric/other Furnaces for use in Crematoriums for Covid-19 management. Based on the
discussions, the GoM recommended reduction of GST rate from 18% to 12% on such
Gas/Electric/other Furnaces (incinerators) for use in Crematoriums till 31st August, 2021.
5.10. Other items: With regard to all other items, viz. RT PCR Machines, RNA Extraction
Machines, Genome Sequencing Kits, Genome Sequencing Machines, Raw materials for Manufacture
of Covid Testing Kits, PPE Kits, N95 masks, triple layer masks, surgical masks, Ambulances and
Portable Hospital Units, the GoM agreed with the recommendations of the Fitment Committee and
accordingly no change in GST rate on these items is proposed.
6. Personal imports of concentrators: The GoM was also briefed of the petition filed before
the Hon’ble Delhi High Court (WP (C) No. 5149/2021) and the order dated 21.05.2021 of the Hon’ble
High Court whereby exemption under entry 607A of notification 50/2017-Customs had been extended
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on personal import of concentrator as gift, by treating the same as lifesaving medicine. The GoM was
also made aware of the Order dated 01.06.2021 of the Hon’ble Supreme Court, whereby the operation
of the ibid order dated 21.05.2021 of the Hon’ble Delhi High Court has been stayed. The GoM was
informed that as per the submissions made by the Learned Attorney General of India before the
Hon’ble Supreme Court, the GoM would also scrutinize the need for further relief on Covid-19
related individual items, including Oxygen Concentrators. The GoM, after detailed discussion on the
issue recommended that the reduced rate of 5% may suitably apply to personal imports of
concentrator, including gifts to ensure uniform tax rate for import of concentrator by individual as a
gift or others, while being aware of the fact that the matter is placed before the Hon’ble Supreme
Court for a final decision.
6. Recommendations of the GoM
Based on the discussions as para 5 and 6 above, the GoM makes the following
recommendations to the GST Council on concessions/ exemption on GST rates on Covid-19 relief
material (upto 31.8.2021),
S.
No.
Description
Present GST
Rate
GoM Recommended
GST Rate
A. Vaccines
1. Covid-19 Vaccines 5% No
change
B. Medicines
1. Tocilizumab 5% Nil
2. Amphotericin B 5% Nil
3. Anti-Coagulants like Heparin 12% 5%
4. Remdesivir 12% 5%
5.
Any other drug recommended by Ministry of
Health and Family Welfare and Dept. of
Pharma for Covid treatment
Applicable
Rate
5%
S.
No.
Description
Present GST
Rate
GoM Recommended
GST Rate
C. Oxygen, Oxygen generation equipment and related medical devices
1. Medical Grade Oxygen 12% 5%
2.
Oxygen Concentrator/ Generator, including
personal imports thereof
12% 5%
3. Ventilators 12% 5%
4. Ventilator masks / canula / helmet 12% 5%
5. BiPAP Machine 12% 5%
6. High flow nasal canula (HFNC) device 12% 5%
D. Testing Kits and Machines
1. Covid Testing Kits 12% 5%
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2.
Specified Inflammatory Diagnostic Kits,
namely
D-Dimer, IL-6, Ferritin and LDH
12% 5%
3.
(i) RT PCR Machines;
(ii) RNA Extraction
Machines (iii)Genome
sequencing machine
18%
No
change
4. Genome sequencing kits 12% No
change
5. Raw materials for Covid Testing Kits
Applicable
rate
No
change
E. Other Covid-19 related relief material
1.
Pulse Oximeters, including personal imports
thereof
12% 5%
2. Hand Sanitizer 18% 5%
3. Temperature check equipment 18% 12%
4. Gas/Electric/other Furnaces for crematorium 18% 12%
5. PPE Kits 5% No
change
6. N95, triple layer, surgical masks 5% No
change
7. Ambulances 28% No
change
8. Portable Hospital Units 18% No
change
These rate reductions/exemptions are recommended for a period upto 31.8.2021
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Annexure-A
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Annexure B
Agenda Item 11: Issues recommended by the Fitment Committee for the consideration of the
GST Council
Agenda Item 11(i): Covid-19 related recommendations
This agenda note deals with representations/recommendations received from States,
Ministries and other stake holders (trade and individuals) seeking reduction/exemption in GST rates
on items being used for Covid-19 relief. These representations/recommendations can be broadly
classified under two categories as under -
A. Requests for enhancement of the scope of Ad hoc Exemption Order No. 04/2021-
Customs dated 03.05.2021 for Covid-19 relief goods received from abroad; and
B. Requests for reduction in GST rates on Covid-19 related drugs, vaccines and other
goods/equipment.
In certain cases, petition for relief has been directly filed before the Hon’ble High Courts, mostly
relating to personal import of concentrator.
2. These issues have been considered in detail by the Fitment Committee and are summarised
below, -
A. Requests for enhancement of the scope of Ad hoc Exemption Order No. 04/2021-
Customs dated 03.05.2021
2.1 Amidst the surging second wave of the COVID-19 pandemic, requests have been received for
exempting COVID-19 relief material donated from abroad and meant for free distribution, from
customs duties, including IGST. In view of the exceptional circumstances, an Ad Hoc Exemption
Order No. 4/2021-Customs dated 3.5.2021 was issued granting exemption from IGST on those goods
for COVID-19 relief imported free of cost for free distribution, till 30th June, 2021. The Basic
Customs Duty (BCD) and Health Cess has also been exempted on these items vide separate
notifications.
2.2 In this regard, representations have been received from various States, Ministries and other
offices of Centre as well as other stakeholders to extend the IGST exemption to goods specified in the
Ad hoc Exemption Order No. 04/2021-Customs dated 03.05.2021, when these are imported, -
(a) at own cost by UN and its agencies, especially WHO, UNICEF and UNDP for free
distribution to States and other agencies;
(b) at own cost by donor organisations based in India, whether governmental, non-governmental
or purely private, for free distribution or donation to government; and
(c) by corporates by their Corporate Social Responsibility (CSR) funds, for free distribution
either to State or any hospitals/facilities involved in Covid-19 management.
2.3 The above representations were discussed in the Fitment Committee and the Committee was
of the view that there was merit in extending the IGST exemption to import of the specified Covid
relief material by any entity, at its own cost, for free distribution or donation to government or
hospitals/facilities involved in Covid-19 management, subject to such conditions as may be prescribed
to prevent misuse of this exemption. This exemption may terminate on the same date as Ad hoc
exemption terminates (30.6.2019). The proposal for consideration of the Council is that exemption
from IGST be granted to import by any person if such goods are supplied to Central or State
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Government or to any not-for-profit hospital/facility involved in Covid 19 management. The
condition of this exemption may be that the (i) importer shall submit a letter from the donee that the
importer shall be donating the imported goods to them, and (ii) the importer shall, within 3 months
from imports, submit a letter from donee that imported goods were received by them.
B. Requests for reduction in GST rates on Covid-19 related drugs, vaccines and other
goods/equipment
3.1 Representations have also been received from various stakeholders for reduction in GST rates
on specified goods being used in Covid-19 relief in the current wave of the pandemic. These requests
are broadly related to reduction in GST Rates on, -
(a) Covid-19 Vaccine;
(b) Covid-19 related drugs and medicines; and
(c) Other goods/equipment being used for Covid management and relief.
3.2 While examining these views, the Fitment Committee was broadly of the view that while
there is need for providing relief by way of GST concessions for identified Covid-19 relief items,
certain aspect relevant to decision making need consideration, which are as follows:
(i) Relief may be considered only by way of rate reduction
(ii) Upfront exemption to manufactured goods is not desirable as exemption adversely impact
domestic manufacturing
(iii) The general lowest rate of GST is 5%. Therefore, on merit 5% rate be considered where
concession is to be considered. Any special lower rate may not be opted for considering
5% is a nominal rate, it the lowest standard rate that applies to other lifesaving medicines.
(iv) The purchase of goods by Government may not require exemption as cost is paid by the
Governments. Tax also goes to Government.
(v) GST concessions should essentially be considered on those items which are critical and
are procured by patients.
(vi) Zero rating of items for domestic consumption is not permissible in law.
3.3 Further, the Fitment Committee also took note of the Writ Petitions being filed in various
High Courts of the country seeking IGST exemption on personal imports of Oxygen Concentrators
(received as gifts).
3.4 The proposal for reduction in IGST rate on Oxygen Concentrators and other critical goods
and equipment for Covid-19 was discussed in detail and the recommendation thereon are mentioned
in para 3.7 below.
Covid-19 Vaccine
3.5 With regard to Covid-19 Vaccine, the Committee was of the view that such vaccines are
already in the lowest GST rate slab of 5%. These are almost entirely being procured by the Centre and
State governments and being provided free of cost. GST paid would ultimately accrue to Centre and
the States itself. On the other hand, granting complete exemption would result in increased cost of
production because the domestic manufacturers of Covid-19 vaccines would not be able to take Input
Tax Credit (ITC) on tax paid on their input goods and services. Accordingly, the Fitment Committee
was of the view that Covid-19 vaccines may continue at 5% rate.
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Covid-19 related drugs and medicines
3.6 With regard to Covid-19 related drugs and medicines, including anti-body cocktails, the
Fitment Committee noted that most of the drugs being used in Covid-19 management are already at a
concessional rate of 12% or 5%. Further, the Covid-19 treatment protocol was also undergoing
changes based on new learnings and studies on efficacy of drugs and medicines being used. That
being so, the committee while in principle arriving at a view that the GST rate on such Covid-19
related drugs and medicines should be lower, it may not be feasible to identify any particular drug that
is meant for Covid cure. Committee also observed that recently Remdesivir has also been removed by
WHO from official medical list. If, Ministry of Health and Family Welfare, later recommends any
medicine specifically the same may be examined for GST concession.
Other goods/equipment being used for Covid Management
3.7 The Fitment Committee also discussed the representations on reduction in Other
goods/equipment being used for Covid management and relief and recommendations of the
Committee in this regard are as under, -
S.
No.
Description of Goods
Present
GST Rate
(%)
GST Rate
recommended
by Fitment
Committee
(%)
Comments
A. Recommendation of Fitment Committee for change in GST rate on Goods
1. Medical Grade Oxygen 12% 5% till
31.07.2021
• Keeping into account the
present situation, Fitment
Committee took a view to
reduce GST on Medical
Oxygen, Oxygen
Concentrators and other
oxygen generating
equipment to 5% until 31st
July, 2021.
• Full exemption from GST
is not recommended as
that would result in
increased cost of
production of these goods
because their domestic
manufacturers would not
be able to take ITC on tax
paid on their input goods
and services.
2. Oxygen
Concentrators/generator
12% 5% till
31.07.2021
3. Pulse Oximeters including
personal imports
12% 5% till
31.07.2021
• Considering the fact that
Pulse Oximeters find
significant use in Covid-
19 home management,
Fitment Committee
recommended reduction in
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S.
No.
Description of Goods
Present
GST Rate
(%)
GST Rate
recommended
by Fitment
Committee
(%)
Comments
GST Rate to 5% until 31st
July, 2021.
4. Covid Testing Kits 12% 5% till
31.08.2021
• Owing to the increased
demand for Covid-19
testing during the current
wave of the pandemic, the
Fitment Committee was of
the view that the GST rate
on such testing kits be
reduced to 5% till
31.08.2021.
B. Items where no change of GST Rate proposed by Fitment Committee
1. PPE Kits 5% No change • PPE Kit and mask are
already at 5%. There is
substantial production of
these goods in the country.
• Hand sanitizer is a
common use item. Even
soap is at 18%. Masses
use soap.
• Ventilators is not an item
for procurement by an
individual. It is not as
critical and short supply as
oxygen concentrator. 12%
is a reasonable rate as
applies to all medical
equipment and hence it
may continue at 12%
• Full exemption from GST
is not recommended as
that would result in
increased cost of
production of these goods
because their domestic
manufacturers would not
be able to take ITC on tax
paid on their input goods
and services
2. N95 masks/ triple layer
masks, Surgical masks
5% No change
3. Ventilators 12% No change
4. Hand sanitizers 18% No change
5. Temperature check
equipment
18% No change
6. Ambulances 28% No change • The Fitment Committee
did not recommend any
change in GST rate as a
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S.
No.
Description of Goods
Present
GST Rate
(%)
GST Rate
recommended
by Fitment
Committee
(%)
Comments
majority these ambulances
are modified after
clearance as normal
vehicles.
• Ambulances are for
institutional sale.
7. Portable Hospital Units 18% No change • The Fitment Committee
was of the view that such
Portable Hospital Units
have very limited use in
the context of Covid-19
management.
• The Fitment Committee
accordingly did not
recommend any change in
GST rate on these goods.
8. Raw materials for
manufacture of Covid
Testing Kits
Applicable
Rate
No change • The Fitment Committee
was of the view that these
are goods are in the nature
of inputs and the GST
paid on such goods is
available as ITC to the
buyers thereof.
• Accordingly, the Fitment
Committee did not
recommend any change in
GST rate on these goods.
9. RT PCR machines 18% No change
10. RNA extraction machines 18% No change
11. Genome sequencing kits and
machines
12% / 18% No change
12. Specified Inflammatory
Diagnostic Kit namely D-
Dimer, IL-6, Ferritin and
LDH
12% No change • The Fitment Committee
was of the view that these
diagnostic kits are used
for diagnosis of diseases
other than Covid-19 also.
• Accordingly, the Fitment
Committee did not
recommend any change in
GST rate on these goods.
3.8 It is also to mention that in a petition filed before the Hon’ble Delhi High Court (WP No.
16554/2021) the Hon’ble Delhi High Court, vide order dated 21.5.2020, has given relief and has
interpreted that exemption is available to the petitioner from IGST, on personal import of concentrator
as gift, vide an entry 607A of notification 50/2017-Cus. This entry was inserted on the
recommendation of GST Council (23rd meeting held on 10.11.2017.). Said entry 607A provides
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exemption for lifesaving drugs and medicines for personal use, supplied free of cost by overseas
supplier’ subject to the similar condition of certification by prescribed medical authorities. In the
process, Hon’ble Court has also waived of the condition as prescribed as being impractical and
inefficacious and replaced the requirement of certification by medical authority in each case by a self-
certification by the importer. Court has stated that drugs include oxygen concentrator and therefore
covered under this exemption. It may be mentioned that Court was apprised the GST Council shall be
looking at the issues of General exemption from GST on covid relief items. Hon’ble Council shall be
updated of action taken in the matter during the meeting of the Council.
Agenda for 44th GSTCM
GST Council Meeting Category
Category the value
On