GST News: GST rate for COVID-19 drugs set at 5% GST: govt

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COVID-19 drugs and devices have been sold at a 5% GST rate while other drugs have been sold at a GST rate of between 5 and 12% since the start of the pandemic, the Minister of State said at Union Finance, Pankaj Chaudhary, in the Lok Sabha on Monday. Chaudhary also said that 66% of government-sponsored health insurance schemes in the country are run by the central government.

“When the COVID-19 pandemic started, a decision was made to sell all medicines at the GST rate between 5 and 12% and the GST rate for medicines and devices related to COVID-19 was reduced 5%,” he said. said during question time.

The minister said the GST rate for health insurance is 18%, which is in line with international standards and similar to what it was before the GST in the country.

He said senior citizens can avail a tax refund of up to Rs 1 lakh on health insurance policies.

Chaudhary said GST rates and exemptions on all services (including GST on health insurance premiums) are prescribed on the recommendations of the GST Board, which is a constitutional body made up of the finance minister of Union and ministers appointed by the respective state and union territory governments.

“At present, the Goods and Services Tax (GST) on health insurance services is levied at the standard rate, i.e. 18%. Bima Yojana (RSBY), Universal Health Insurance Scheme , Jan Argoya Bima Policy and Niramaya Health Insurance Scheme are fully exempt from GST,” he said.

Additionally, he said, health services are also exempt from the GST.

Representations to reduce the GST on health insurance were made to the GST Board at its 31st meeting held on December 22, 2018 and at its 37th meeting held on September 20, 2019.

The GST Board did not make a recommendation for the GST reduction, he said.

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