GST on oxygen concentrators cut

#GS3 #ECONOMY TAXATION #GST REFORMS 

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Context

  •  Oxygen concentrators received as gifts or ordered online from overseas would attract Goods and Services Tax (GST), but the GST rate payable was reduced from 28% to 12% by the Finance Ministry.
  • The government had notified changes to the foreign trade policy to allow the import of oxygen concentrators for personal use through e-commerce portals, post or courier till July 31, 2021.

 oxygen concentrators are commercially imported 

  •  Customs clearance will be granted for such imports by treating them on par with “gifts”. So far, such an exemption was only allowed for life saving drugs and rakhis.
  •  Though Customs Duty is exempt on such imports, integrated GST on oxygen concentrator is payable.
  •  The IGST rate for commercial imports of oxygen concentrators is 12%, but 28% if imported for personal use, the generic rate on goods imported for personal use, except drugs and medicines.
  •  However, the IGST rate will be lowered to 12% for oxygen concentrators imported for personal use till the end of June this year.

BIASA BASICS 

GST exemption for COVID-19 drugs, medical equipment

  •  The Centre is empowered under public interest to exempt GST in accordance with -
  •  Section 11 of the Central Goods and Services Tax Act, 2017,
  •  Section 6 of the Integrated Goods and Services Tax Act, 2017, and
  •  The corresponding equivalent sections in the State legislations governing States Goods and Services.

GST on Medicines and Medical Supplies in India

  • NIL Rate of GST on Medicines and other Medical Supplies
  •  5% Rate of GST on Medicines and other Medical Supplies
  • 12% Rate of GST on Medicines and other Medical Supplies
Hold urgent GST meet to cut tax on key medicines, equipment: States |  Business Standard News

Impact of GST on Medicines and Medical Supplies

  • The introduction of GST in the place of Value Added Tax (VAT) has removed the cascading of tax on different levels of production and supply of medicines and medical supplies of all kinds.
  •  The GST is imposed on medicines in such a way that the prices have remained unchanged in most of the cases.
  • For dietary products, the excise duty is removed and taxes are reduced for the benefit for the consumers.
  • The pharmaceutical companies had to warehouse the supplies as a VAT at the rate of 2% was charged for the inter state supplies but with the introduction of GST, the warehousing cost is reduced as benefit of Input Tax Credit is provided and rate of GST is also same throughout all the states. This is the main impact of GST.

 

SOURCE: THE HINDU 

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