GST Council waives tax on black fungus drug amphotericin

Bengaluru, June 15, 2021 

The GST Council has now waived tax rates on black fungus drug amphotericin. It has also gone ahead to slash rates of several other Covid-related essential items like drugs, ventilators, testing kits among others. These revised rates are valid till September end as against the earlier August end.

GST on black fungus drug amphotericin B has been slashed to nil from 5 per cent along with tocilizumab. The Council decided to go ahead with the recommendations made by the Group of Ministers (GoM) in their report to bring down the rates in the wake of the spread of the deadly black fungus.

India has reported over 28,200 cases of the deadly fungal infection known as mucormycosis in a growing epidemic of the disease. From 28 states, 28,252 cases of mucormycosis are reported. Of these, 86%, or 24,370 cases, have a history of Covid-19 and 62.3%, or 17,601, have a history of diabetes. The difficult to treat condition is also facing the challenging of drug cost.

Karnataka accounts for 2,828 cases with 157 fatalities had the government to set up a dedicated facility to treat at Bowring & Lady Curzon Hospital Bengaluru besides identify 6 regional centres: Mysore Medical College And Research Institute, Shimoga Institute of Medical Sciences, Gulbarga Institute of Medical Sciences in Kalaburagi, Karnataka Institute of Medical Sciences in Hubballi, Kasturba Medical College in Manipal and Wenlock Hospital in Mangaluru for treatment. Experts here pointed out drug affordability was the biggest deterrent to treatment access.

Manish Mishra, Partner, J Sagar Associates noted, relief measure announced by GST Council on are welcome steps towards combating the Covid-19 pandemic. Reduction in GST rates on Covid and black fungus medicines, medical oxygen and ventilators, oxygen concentrators and generators, BiPAP machines, testing kits, oximeters, hand sanitisers, thermometers and medical ambulances were the need of the hour and would lead to reduction in prices of these essential items and making them available to a large segment of the society.

While the GST Council has decided to continue with 5 per cent GST rate on Covid vaccines. This is because the government is purchasing and paying GST too on Covid-19 vaccines and they are being given free of cost to the public. Hence, the GST rate will make no difference or impact on the people, said minister for finance Nirmala Sitharaman. 

For ambulances, the GST rate has been reduced from 28 per cent to 12 per cent and for hand sanitsers from 18 per cent to 5 per cent. Genome sequencing kits will continue to be charged a 12 GST. Specified inflammatory diagnostic kits like D-Dimer, IL-6, Ferritin, LDH will also be charged at 5 per cent. Pulse oximeters, hand sanitisers and temperature check equipment will attract lower 5 per cent tax.

“While a lot has been debated on complete GST exemption for vaccines and other essential drugs, an exemption would lead to duty inversion, resulting in loss of input credits for the domestic manufacturers. A marginal rate of 5% would ensure availability of credits through the supply chain, the benefits of which could be passed on by way of reduction in prices. In case of vaccines this 5% GST would not impact majority of the population, since Centre is going to purchase 75% of the vaccines for public distribution free of cost. Now that Centre has agreed to share 70% of GST revenue from vaccines. LiveMint