GST exemption on vaccines will lead to high prices: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on May 9 responded to West Bengal Chief Minister Mamata Banerjee’s letter seeking waiver of taxes on COVID-19-related drugs and medical equipment. Such a move, explained Sitharaman, would be “counterproductive” and lead to an increase in prices as the manufacturers would not be able to offset their input costs.

The Centre is not in favour of waiving the GST on vaccines as the move is expected to increase the prices of anti-COVID jabs, Sitharaman said.

“If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price,” she tweeted.

Banerjee, in her letter addressed to Prime Minister Narendra Modi, sought a waiver on the GST levied on oxygen cylinders, along with the exemption of other medical equipment and drugs required in COVID-19 treatment from custom duties and other taxes. Moneycontrol