The Minister sought extension of the compensation regime for five years beyond 2022, till 2027.
Rajasthan raised the issue of differential pricing for COVID-19 vaccines at the GST Council’s meeting on Friday, while pointing out that the State government was forced to float global tenders for procuring the vaccines because of the Centre’s “unwillingness” to help the States in managing the pandemic situation.
“Even developed countries have not issued global tenders for vaccines. The imposition of 5% GST on vaccines and 12% GST on oxygen cylinders, medicines and other material required for treatment of infection is also unjustified,” Shanti Dhariwal, Urban Development and Housing Minister, representing the Rajasthan government in the GST Council, said.
Mr. Dhariwal said the pandemic had adversely affected the State’s revenue earnings, which had reduced by 80% within a month. The State had received ₹7,561.36 crore from the Centre, which included ₹2,957.36 crore as GST compensation and ₹4,604 crore as GST compensation loan.
Mr. Dhariwal said since it was the Centre’s responsibility to compensate the States fully for tax losses, the amount of ₹4,604 crore should be adjusted in the GST compensation grant and the compensation of ₹4,635.29 crore due for 2020-21 should be immediately released.
The Minister sought extension of the compensation regime for five years beyond 2022, till 2027, in view of the increasing requirement of financial resources for the implementation of various social security and welfare schemes. He said the additional borrowing limit should be enhanced to 5% of the Gross State Domestic Product and the GST on vaccines waived to reduce the financial burden on States.
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