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GST rate for COVID-19 medicines pegged at 5% GST: Govt

-By ArdorComm News Network

Since the beginning of the pandemic, COVID-19 medicines and instruments have been sold at a GST rate of 5%, while other medicines have been sold at a GST rate of between 5% and 12%, according to Union Minister of State for Finance Pankaj Chaudhary, who spoke in the Lok Sabha on Monday.

The central government, according to Chaudhary, manages 66% of the country’s government-sponsored health insurance plans. “When the COVID-19 pandemic started, it was decided to sell all drugs at a GST rate between 5 and 12 percent, and the GST rate for COVID-19-related medicines and instruments was reduced to 5%,” he stated during Question Hour.

According to the minister, the GST rate for health insurance is 18 percent, which is in line with international standards and comparable to the pre-GST period in the country. Senior citizens can get a tax rebate of up to Rs 1 lakh on health insurance premiums, according to him. According to Chaudhary, the GST Council, which is a constitutional body comprised of the Union Finance Minister and ministers nominated by respective state and union territory governments, prescribes GST rates and exemptions on all services (including GST on health insurance premiums).

“At present, Goods and Services Tax (GST) on health insurance services is levied at standard rate, i.e., 18 per cent. Specific health insurance schemes catering to the needs of economically weaker sections of the society and differently abled, 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.

Healthcare services, he added, are also excluded from the GST. The GST Council received representations to lower the GST on health insurance in its 31st meeting on December 22, 2018 and its 37th meeting on September 20, 2019. According to him, the GST Council did not offer a recommendation for a reduction in GST.

Source: PTI

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