The government is unlikely to exempt GST on medical items like ventilators, PPEs, masks, test kits and sanitisers, as it would lead to blocked input tax credit (ITC), thereby increasing the cost of manufacturing and increase the price for consumers.

There have been demands from certain sections to exempt GST on certain items like ventilators, personal protective equipment (PPEs), masks, test kits and sanitisers that are essential items for treatment of COVID-19 saying that GST exemption on these items would lead to reduction in prices.

Currently, GST rate on ventilator is 12 per cent; on mask, it is 5 per cent; on test kits, it is 12 per cent; on sanitiser, it is 18 per cent; and on PPE, it is 5 per cent (costing up to Rs 1,000) and 12 per cent (if the cost is more that Rs 1,000 per piece).

Sources said GST exemption on such items would lead to blocked input tax credit (ITC), thereby increasing the cost of manufacturing and a higher price for consumers. GST exemption on such items would jeopardise the interest of the industry and would not result in any significant gains to consumer, they said adding that in the past, GST exemption on sanitary napkin has led to similar situation for the domestic manufacturers.

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