Government not likely to give exemption from GST on masks, life-saving devices, PPE (medical kit)

The government will probably not exempt GST on medical devices like life-saving devices (ventilators), personal protective equipment (PPE), masks, test kits, and sanitizers. As this would restrict input tax credit (ITC) and consequently increase the cost of manufacturing which would increase the cost to the customers. GST (Goods and Services Tax on goods like life-saving devices, PPE, masks, test kits, and sanitizers, on behalf of some sections) ) Was sought to be exempted.

He says the GST rebate on these essential items in the treatment of coronavirus infection will reduce prices. Currently, the GST rate on life-saving equipment is 12 percent, 5 percent on masks, 12 percent on test kits, 18 percent on sanitizers and PPE. But (at a cost of up to Rs 1,000) it is 5 percent and 12 percent on prices above Rs 1,000. According to sources, the input tax credit (IT) from GST exemption on these products Female) will be blocked.

This will increase manufacturing costs and will have to pay a higher price to customers. They say that the GST exemption on these commodities will affect the interests of the industry and will not benefit the customers too much. GST exemption on’sanitary napkins’ in the past created a similar situation for domestic manufacturers.

According to sources, while on one hand customers will not benefit from the GST exemption on these items, on the other hand, the burden of compliance will increase on manufacturers. Because they have to prepare a separate account for the raw materials, services and capital goods that are used in the manufacture of the above items. If they are not in a position to maintain a separate account, they will have to remove the input tax credit on all raw materials/services used in the manufacture of exempted PPE after detailed assessment. Re-exemptions on these commodities make ITC for domestic manufacturers Will be blocked while importers will not face any such obstruction.

Earlier this month, the government announced exemption from basic customs duty and health cess on all the above items, except sanitizer, till 30 September. Sources say the removal of customs duty may be harmful to its domestic manufacturers but to meet the situation arising out of the coronavirus, this step was taken to meet the immediate needs of such items. Domestic supply was not sufficient to meet the increased requirements during this period.