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GST News: GST rate for COVID-19 drugs set at 5% GST: govt

COVID-19 drugs and tools have been sold at a GST rate of five percent since the start of the pandemic, while other drugs are sold at a GST rate of between five and 12 percent, Union Finance Minister Pankaj Chaudhary said in the Lok Sabha on Monday. Chaudhary also said that 66 percent of the country’s state-sponsored health insurance schemes are run by the central government.

“When the COVID-19 pandemic began, a decision was made to sell all drugs at between 5 and 12 percent GST rate, and the GST rate for COVID-19 related drugs and instruments was reduced to five percent,” he said at Question Time.

The minister said the GST rate for health insurance is 18 percent, which is in line with international standards and similar to what it was in the days leading up to GST in the country.

He said seniors can get a tax rebate of up to Rs 1 lakh on health insurance policies.

Chaudhary said GST rates and exemptions for all services (including GST on health insurance premiums) are mandated on the recommendation of the GST Council, which is a constitutional body made up of the Union Treasury Secretary and ministers appointed by the respective state governments and union territories are nominated.

“Currently, Goods and Services Tax (GST) is levied on health insurance benefits at the standard rate, ie 18 per cent. Special health insurance schemes tailored to the needs of economically vulnerable sections of society and people with disabilities, such as Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Argoya Bima Policy and Niramaya Health Insurance Scheme are fully exempt from GST.” he said.

In addition, healthcare services are also exempt from the GST.

Motions to reduce GST on health insurance were presented to the GST Council at its 31st meeting on December 22, 2018 and at its 37th meeting on September 20, 2019.

The GST Council has made no recommendation to lower GST, he said.

https://economictimes.indiatimes.com/news/economy/policy/gst-rate-for-covid-19-medicines-pegged-at-5-gst-govt/articleshow/90638357.cms GST News: GST rate for COVID-19 drugs set at 5% GST: govt

Russell Falcon

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