After Mamata Banerjee Letter, Nirmala Sitharaman Explains Tax On Vaccines

Nirmala Sitharaman said the GST on vaccines and drugs helped manufacturers claim Input Tax Credit to keep costs low.

Finance Minister Nirmala Sitharaman on Sunday said that a 5 per cent tax on vaccines and 12 per cent on medicines and oxygen concentrators was necessary to keep costs low, after a new appeal by West Bengal Chief Minister Mamata Banerjee to waive these fees given India's coronavirus crisis. 16/ A 5% 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.@ANI@PIB_India@PIBKolkata "If full exemption from GST (Goods and Services Tax) were given, the domestic producers of these items would be unable to offset taxes paid on their inputs and input services and would pass these on to the end consumers by increasing their price," she explained in a string of 16 tweets. Ms Sitharaman also said that COVID-19 drugs and related items have already been exempted from import taxes and 70 per cent of the Integrated Goods and Services Tax (IGST) goes down to the states.