The 45th GST Council meeting of the Goods and Service Tax Council (GST Council) was held on 17th September 2021 at Lucknow and was chaired by the Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council Meeting was convened physically for the first time after a span of 22 months with a packed agenda. In this meeting, the GST Council discussed various aspects related to the legal and procedural changes to remove ambiguity/ disputes, exemptions on COVID-19-related medical goods, changes in GST rates of goods and services, and few compliance-related relief measures.
GST Council Meeting had earlier discussed changes to correct inverted duty structure for the footwear and textile industry. This has now been deferred and will be implemented from 1st January 2022. Inverted duty structure anomalies for Ores and specified metals were discussed for correction, but the date has not yet been decided for this.
In light of the recent directions of the Hon'ble High Court of Kerala, the issue of whether specified petroleum products should be brought within the ambit of GST was placed for consideration before the Council. After rounds of discussion, the Council decided that it was not appropriate to do so. Hence, petroleum products will not fall under the purview of GST.
GST concession on covid medicines such as Remdesivir and Tocilizumab has been extended till 31st December 2021. At the same time, drugs such as Favipiravir will be charged at a reduced rate of 5 per cent. However, the concessional tax benefits for medical equipment have not been extended and will end on 30th September 2021. Another important update is that the GST rates on Cancer-related drugs (like Keytruda) have now reduced to 5% from 12%.
The GST Council has approved a proposal to make E-Commerce Operators (like Swiggy/ Zomato/Ola/Uber) responsible for collecting and depositing 5 per cent GST to the Government. This amendment will stand effective 1st January 2022. At present, if a person orders food using Swiggy or Zomato, they collect a 5 per cent tax on food from the customer and pass it on to the restaurant. However, the Government explained that some restaurants had not deposited their tax despite high turnover. Therefore, effective from 1st January 2022, these apps will collect the tax on behalf of the restaurant and deposit it with the Government. Also, this will have no impact on the customers as there is no change in the tax rate. However, there will be an increased compliance burden for small restaurants and online aggregators.
The Finance Minister highlighted that the payment for compensation to states for the shortfall in revenue of states resulting from subsuming taxes such as VAT in GST would end in June next year. She further added that the compensation cess will continue to be collected on luxury goods until March 2026.
Form GST ITC-04 is required for filing details related to inputs or capital goods dispatched or received from a job worker. In this regard following relaxations have been announced:
S. No. | Particulars | Existing rate (%) | Proposed rate* (%) |
1. | Retro fitment kits for vehicles used by the disabled | Applicable rate | 5 |
2. | Fortified Rice Kernels for schemes like ICDS etc. | 18 | 5 |
3. | Medicine Keytruda for treatment of cancer | 12 | 5 |
4. | Biodiesel supplied to OMCs for blending with Diesel | 12 | 5 |
5. | Ores and concentrates of metals such as iron, copper, aluminium, zinc and few others | 5 | 18 |
6. | Specified Renewable Energy Devices and parts | 5 | 12 |
7. | Cartons, boxes, bags, packing containers of paper etc. | 12/ 18 | 18 |
8. | Waste and scrap of polyurethanes and other plastics | 5 | 18 |
9. | All kinds of pens | 12/ 18 | 18 |
10. | Railway parts, locomotives & other goods in Chapter 86 | 12 | 18 |
11. | Miscellaneous goods of paper like cards, catalogue, printed material (Chapter 49 of tariff) | 12 | 18 |
12. | IGST on import of medicines for personal use, namely:
|
12 | Nil |
13. | IGST exemption on goods supplied at Indo-Bangladesh Border haats. | Applicable rate | Nil |
14. | Unintended waste generated during the production of the fish meal except for Fish Oil | Nil (for the period 1st July 2017 to 30th September 2019) |
*The changes will be effective from 1st October 2021.
S. No. | Particulars | Existing rate (%) | Proposed rate* (%) |
1. | The validity of the GST exemption on transporting goods by vessel and air from India to outside India is extended to 30th September 2022. | - | Nil |
2. | Services by way of grant of National Permit to goods carriages on payment of a fee | 18 | Nil |
3. | Skill Training for which Government bears 75% or more of the expenditure [presently exemption applies only if Govt funds 100%] | 18 | Nil |
4. | Services related to AFC Women's Asia Cup 2022. | 18 | Nil |
5. | Licensing services/ the right to broadcast and show original films, sound recordings, radio, and television programmes [to bring parity between a distribution and licensing services] | 12 | 18 |
6. | Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with colour printing of images from film or digital media) | 12 | 18 |
7. | Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn. | ||
8. | E-Commerce Operators are being made liable to pay tax on the following services provided through them:
|
||
9. | Certain relaxations have been made in conditions relating to IGST exemption pertaining to import of goods on a lease, where GST is paid on the lease amount, to allow this exemption even if:
|
*The changes will be effective from 1st October 2021. You can access the press release version of the 45th GST Council Meeting held on 17th January 2021 here