The conference is important because several important choices will be made, some of which will have a direct influence on India’s struggle against Covid-19 in the second wave. The GST Council is expected to debate lowering the tax rate on Covid medications, vaccines, and medical equipment, as well as ways to compensate states for the income shortfall promised.

Finance ministers from eight states – Rajasthan, Punjab, Chhattisgarh, Tamil Nadu, Maharashtra, Jharkhand, Kerala, and West Bengal – have devised a joint strategy to press for a zero-tax rate on Covid essentials ahead of the top decision-making body’s first meeting, according to news reports.

Domestic vaccine supply and commercial imports are now subject to a 5% GST, whereas Covid-related medications and oxygen concentrators are subject to a 12% GST.

Another key topic that is expected to be discussed during today’s meeting is state compensation. States are expected to ask for a five-year extension of the compensation plan since they are facing a massive income loss as a result of the outbreak.

It is worth mentioning that the compensation shortfall to states is expected at around INR 1.6 lakh crore during the current fiscal year, most of which are likely to be funded by borrowings.

Many states may request a correction to the inverted duty structure at today’s conference, particularly in vital industries including fertilizers, steel kitchenware, solar panels, tractors, tires, textiles, and fabric.

According to sources, the GST Council may consider decreasing the 28 percent GST rate on two-wheelers to help the industry recover during the epidemic. There may also be a discussion about bringing natural gas within the GST scheme.