GST Council rejigs some rates, extends cess levy, petroleum still out

The GST Council on Friday decided to provide relief on Covidrelated items by extending the concessional rate of duty on medicines for it upto December 31 2021 while taking no decision on bringing petroleum products under its ambit saying it was not the right time yetIt also decided to correct inverted duty structure in footwear and textile sectors while deciding to treat food delivery apps such as Zomato and Swiggy as restaurants thereby becoming responsible to pay 5 per cent GST on supplies made by them However the new system will not make meals dearer since no new tax component has been addedThe Council which met in Lucknow in physical form for the first time since the outbreak of Covid pandemic did discuss inclusion of petroleum products under GST on the directions of the Kerala High Court but decided that it was not the right time to undertake this change Finance Minister Nirmala Sitharaman said after the meetingBriefing the media after the meeting she said We have taken a few people friendly decisionsSitharaman also said that the Council has granted tax exemption on drugs to treat muscular atrophy imported for personal use only and reduced the duty on drugs for cancer treatment from 12 per cent to 5 per centAlso read Swiggy Zomato to collect 5 per cent GST on deliveries food not to get dearerBesides the Council exempted the IGST on imports of leased aircrafts and on exports of goods by vessel or air till September 30 2022However it increased GST on railway parts locomotives and other goods to 18 from 12 per centIt also discussed the compensation formula agreed for states to meet their revenue shortfall on account of the GST and decided that the Centre would continue to levy compensation cess beyond the stipulated five years period ending July 2022 to upto March 2026 to pay back the loans taken to meet the shortfall in FY21 and FY22With regard to Covid relief medicines the concessional GST rate valid till September 30 had been extended to December 31 for Amphotericin B used for treating black fungus Remdesivir Tocilizumab and anticoagulants like HeparinBesides reduced GST rate of 5 per cent will also be available till December 31 in the case of Covid19 treatment drugs namely Itolizumab Posaconazol Infliximab Favipiravir Casirivimab amp Imdevimab 2DeoxyDGlucose Bamlanivimab and EtesevimabThe Council also decided to reduce rate on supply of biofuel to oil companies from 12 to 5 per cent while raising duty on a host of ores and concentrates of metals such as iron copper aluminum zinc and few others from 5 to 18 per cent to correct the duty anomalyMoreover brick kilns would be brought under special composition scheme with threshold limit of Rs 20 lakhs with effect from April 1 2022 Bricks would attract GST at the rate of 6 per cent without ITC under the scheme and a 12 per cent with ITC would otherwise apply to bricksIn order to correct inverted duty structure in footwear and textiles sector as was discussed in earlier GST Council Meeting and was deferred for an appropriate time the Council decided it will be implemented with effect from January 1 2022On the issue of compensation scenario a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 202021 and 202122 In this context various options as have been recommended by various committeesforums were presented and the Council deliberated at length on the issueSitharaman said the Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors and rationalise the rates and review exemptions from the point of view of revenue augmentation from GSTIt was also decided to set up a GoM to discuss ways and means of using technology to further improve compliance including monitoring through improved eway bill systems einvoices FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the StatesThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever