Hyderabad: One of the ten good governance principles stipulated to himself by Prime Minister Modi says - public good should be the center point of all government policies. However the spirit of this principle is missing in the manner in which the Covid-19 crisis is being dealt with.
In a staggering contention, Finance Minister Nirmala Sitharaman has stated that removing tax on the important medicines to treat COVID19 will not be in the interest of the people.
Recently, West Bengal Chief Minister Mamata Banerjee made an appeal to the Prime Minister to exempt GST on COVID19 vaccines, life support drugs and oxygen concentrators. In an urgent response to her request, the Finance Minister has stated that tax exemption will cause the prices to go up further.
She has opined that if full exemption from GST 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.
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Stating that the dance of death by Covid has been ruining families, governments of Punjab, Chhattisgarh and Delhi have contended that is not proper to derive revenue from COVID vaccines and other life saving drugs in this crisis situation. The governments have been pleading with the Center to immediately convene the meeting of GST council to take a decision on the matter.
Section 11(1) of the Goods and Services Act facilitates tax exemptions on any goods in the interest of the people. How can the Center ignore this relief providing provision at a time when the entire country is in the grip of the pandemic?
There are means by which relief can be provided to the people without causing loss to the manufacturers. It is astonishing to note that the Center is refusing to acknowledge the presence of such provisions.
At present the government is collecting 12 percent GST on oxygen concentrators and drugs and five percent tax on COVID vaccines. Tax experts are stating that 100 percent tax exemption can be given without denying the rights of the manufacturers in connection with input credits. Government can immediately give effect to the exemption by issuing a notification with the assent from the GST council.
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Adopting any of the two modes for a limited period of time could be greatly beneficial to the common-man. The government is not paying heed to the suggestion that the issue of input credits will not arise if tax exemption is given to the raw materials used in making vaccines and medicines.
However, Union Finance Minister maintains that the government has no intention to fill its coffers by imposing taxes on the people in this hour of crisis. According to her, 70 percent of the GST collections go to the States. Till the first week of February, the Center with-held the States’ GST share of Rs 2 lakh crores. In this backdrop the central government’s argument that it is not gaining much from the GST on the said items, is truly staggering.
In order to save their dear ones, families of COVID patients are pledging all their belongings. The common people will get at least a pinch of relief only when the meeting of the GST council is convened to review taxes on vaccines, drugs and equipment.
