As we all are aware, the whole world is battling against the COVID
situation, India is also struggling to fight the situation. Health care
services have to be fully equipped and with all the necessary goods
available for the treatment. But did you know there is a tax levied on
COVID-related supplies? Let’s take a brief look.
GST rates on COVID supplies :
PPE Kits 18
Hand wash 18
Alcohol-based sanitizers 18
Cotton masks 5
Non-cotton masks 12
Medical oxygen 12
Oxygen concentrator 12
Oxygen plant 18
Diagnostic services Exempt
Health care services Exempt
Our central government has exempted COVID supplies from the levy
of Basic Customs Duty, IGST, and health cess on import, but we are
not able to achieve exemption from GST.
As we can see from the chart above how high the tax rates are on
essential items. Consumers have to pay those high prices due to
which they are demanding exemption from GST or lower rates.
Why GST is levied on COVID supplies?
If the supplies are made fully exempt from GST, manufacturers will
not be able to claim an Input tax credit. It results in increased price
levels of the products. Thus there is a levy of tax on COVID supplies.
What can be done?
Section 54(3) of CGST Act 2017, states that any registered person
may claim unutilized ITC at the end of the tax period, it is applicable
only for zero-rated supplies made without paying tax and where
input taxes are higher than output supplies.
Manufacturers can claim ITC using this benefit the law provides.
Another option is that the govt. can bring down the higher rates of
28, 18, and 12 to 5%. That way all the supplies will be affordable at
reasonable prices and manufacturers will also not face difficulties. It
benefits both the manufacturers and consumers.
After analyzing the situation and the reason why there is GST on
these items and what can be done to make the situation better, we
can conclude that, COVID supplies should be made exempt from GST.
In a global emergency like this, COVID related supplies have to be
easily available at affordable prices. The central government and the
GST council should hold meetings together and discuss the issue and
take a decision that is beneficial to both manufacturers and the end