FM Responds to Mamata After Her Letter to Modi on COVID Tax Relief

Mamata Banerjee had asked PM to augment supplies of COVID-related medicines and oxygen in Bengal.

File photo of West Bengal Chief Minister Mamata Banerjee meeting Prime Minister Narendra Modi on 18 September 2019.

(Photo: IANS/PIB)

Responding to Bengal Chief Minister Mamata Banerjee's request to Prime Minister Narendra Modi for tax waivers on the import of COVID-related medicines and equipment, Finance Minister Nirmala Sitharaman said that such items had already been exempted from GST earlier on 3 May.

On 9 May, Sitharaman said, “A list of items for COVID relief granted exemption from IGST for imports was issued on May 3. These were given exemption from Customs Duty/health cess even earlier. West Bengal CM Mamata Banerjee may notice that items in your list are covered.”

In her letter to the PM Modi, Bengal CM Mamata Banerjee had written:

“Many donors and agencies have approached the state government to consider exemption on these items from duty/SGST/CGST/IGST. As the rate structure falls under the purview of the Centre, I would request that these items may be exempted from GST/customs duty and other such duties and taxes, to help remove supply constraints.”

Mamata Banerjee, in her letter to the PM

Donations like these, the CM stressed, would "greatly supplement the efforts of the state government in meeting the huge gap in the demand and supply" of medical resources.

But FM Sitharaman clarified that a full exemption from Customs duties, including IGST, is already available to "all COVID relief material (not confined to a list) imported by Indian Red Cross for free distribution in the country”.

The items include Remdesivir injections, Remdesivir API, the chemicals required to manufacture this drug, COVID diagnostic kits, medical oxygen, equipment used for the manufacture, storage and transportation of oxygen, equipment used for providing oxygen therapy to COVID patients such as oxygen concentrators, ventilators, non-invasive oxygen masks, etc.

She informed that a 5 percent tax on vaccines and 12 per cent on medicines and oxygen concentrators was necessary to keep costs low for citizens. “If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price.”

She also said that COVID-related items have already been exempted from import taxes and 70 per cent of the IGST goes down to the states.

Third Letter to PM Since Winning Bengal Elections

This was Banerjee's third letter on the COVID crisis in the state to PM Modi since being sworn in for a third term on Wednesday. On Friday, she had written to highlight a potential oxygen supply crisis.

This is Chief Minister Banerjee’s third letter to PM Modi on the Covid crisis

The CM said the demand had already gone up to 470 metric tonnes per day and that it was expected to rise to 550 MT within seven to eight days.

She pointed out that the Centre – which assesses and allocates oxygen to states – had increased supply of oxygen produced in Bengal to other states, rather than allowing it to remain in Bengal.

On Monday, the Centre had said IGST (Integrated Goods and Services Tax, levied on inter-state movement of goods and imports) on COVID-related relief material from abroad would be waived till June 30.

Two weeks ago the Centre had also waived, with immediate effect for three months, customs duty and health cess on the import of COVID vaccines, oxygen and oxygen-related equipment.

Surge In Bengal

Bengal has experienced a surge in daily Covid cases over the past few weeks, which coincides with campaigning and voting for the 2021 Assembly election that Ms Banerjee's Trinamool won.

Experts say the increase may be the result of poll campaigning, during which thousands violated social distancing to attend rallies and roadshows held by PM Modi and Chief Minister Banerjee.

This morning the state reported over 19,000 new Covid cases in 24 hours to take the active caseload to more than 1.25 lakh. Over 12,000 people have died so far. 

Banerjee has ordered a partial lockdown of the state, including extensive restrictions on movement and requiring all visitors to show a Covid-negative report no older than 72 hours.

(With inputs from NDTV)