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What is the News?
The Finance Minister has chaired the 45th Goods and Service Tax (GST) Council meeting. This was the first in-person GST meet since the Covid-19 pandemic.
What are the key recommendations made at the GST Council meeting?
Concession on Medicines
Life-saving drugs Zolgensma and Viltepso used in the treatment of Spinal-Muscular Atrophy are exempted from GST when imported for personal use.
Extension of existing concessional GST rates on certain COVID-19 treatment drugs upto 31st December 2021.
No Petroleum Products under GST
The Council discussed the proposal to bring petroleum products under the GST. Earlier, Kerala High Court had issued a directive mentioning petrol and diesel should be included in GST considering the high rates. However, the council has decided to keep the proposal out of its ambit for now.
GST Compensation Cess
There will be no GST Compensation mechanism for states from June 2022 as mandated under the law.
Note: As per the GST (Compensation to States) Act, 2017, states are guaranteed compensation for revenue loss on account of implementation of GST for a transition period of five years (2017-2022).
However, the levy of compensation cess will continue from July 2022 onwards till March 2026 to service the borrowing which had been resorted to in order to bridge the compensation gap in the years 2020-21 and 2021-22.
| Read more: Analysis of GST regime in India – Explained, Pointwise |
Zomato, Swiggy under GST
From 1st January 2022, food delivery apps will have to collect and deposit 5% GST with the government, in place of restaurants, for deliveries made by the platforms.
This transfer of responsibility was proposed by the government with the aim of bringing several restaurants that had not been paying taxes under the GST net.
Formation of two Group of Ministers(GoMs):
The GST Council has decided to set up 2 GoMs to examine the issue of correction of inverted duty structure for major sectors and for using technology to further improve compliance, including monitoring.
Note: Inverted tax structure simply refers to a condition where the tax rate on inputs used is higher than the tax rate on the outputs for sale or finished goods.
Source: This post is based on the following articles
- “GST Council not for inclusion of petroleum products: Finance Minister” published in The Hindu on 18th September 2021.
- “Recommendations of 45th GST Council Meeting” published in PIB on 17th September 2021.
