coronavirus: Exemption of tax on drugs and materials on corona, Finance Minister’s reply to Mamata’s demand in 16 tweets

New Delhi:Union Finance Minister Nirmala Sitharaman on Sunday responded to allegations that the tax on corona vaccines and related drugs was being raised. A minimum of 5 per cent tax is required on coronary vaccines, 12 per cent tax on oxygen concentrators and drugs on coronavirus. This helps in reducing the prices, explained Nirmala Sitharaman. West Bengal Chief Minister Mamata Banerjee had demanded tax exemption on related drugs and goods during the Corona crisis.

The minimum tax on vaccines and drugs on corona gives producers an input tax credit (tax refund). This helps them to keep the cost of the product low. The issue was raised by West Bengal Chief Minister Mamata Banerjee. Not only that, but the tax on the import of drugs required for the treatment of corona has already been waived, said Sitharaman.

With the complete waiver of taxes on essential medicines and essential commodities on corona, manufacturers in the country will not be able to avail the input tax credit on taxes paid on raw materials and other materials required for this product. This will shift the burden of taxes on raw materials to consumers and make products or goods and medicines more expensive, Sitharaman said.

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An input tax credit is a refund demanded by a manufacturer. This is a refund of taxes paid on raw materials and services. This helps manufacturers keep prices of drugs or commodities low. But no manufacturer can claim tax refund or input tax credit on products for which no tax is levied, Sitharaman said.

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Import duties on drugs and materials ordered abroad for treatment of coronavirus have already been waived. Also, 70 per cent of the GST levied on these materials goes to the states, said Nirmala Sitharaman. Mamata Banerjee had written a letter to Prime Minister Modi seeking a waiver on import duty on drugs and equipment related to corona.

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