GST Council Meet: Petrol & Diesel Not To Be Brought Under GST, Covid Medicine Exemptions Extended
FM Sitharaman addressed a press conference where she informed that concessional GST rates have been extended for several medicines required in helping coronavirus patients.
New Delhi: Finance Minister Nirmala Sitharaman chaired the GST Council in Lucknow on Friday, which among other things reviewed the tax rate of over four-dozen items and also decided on extending tax concessions on 11 COVID drugs till December 31.
Notably, various important matters such as taxing petrol and diesel under the single national GST tax and a proposal to treat food delivery apps such as Zomato and Swiggy as restaurants and levy a 5 per cent GST tax on supplies made by them were taken up by the Council at its meeting.
After the meeting, FM Sitharaman addressed a press conference where she informed that concessional GST rates have been extended for several medicines required in helping coronavirus patients till December 31 from September 30.
"Concessional GST rates on COVID-19 related medicines were announced earlier, applicable till Sep 30. The concessions have now been extended till Dec 31, 2021," Sitharaman said.
The extension is being given only for medicines that were given exemption earlier (not for medical equipment).
Sitharaman also informed that Cancer-related drugs - Keytruda - along with similar other medicines used in the treatment of cancer as per Health Ministry or Dept of Pharmaceuticals are being recommended that they should come down from 12 per cent to 5 per cent.
GST rate on seven other medicines, which are recommended by Dept of Pharmaceuticals, have also been recommended for reduction from 12 per cent to 5 per cent. That is also extended till 31st December, 2021
Medicines include:
Amphotericin B (0%)
Tocilizumab (0%)
Remdesivir (5%)
Heparin (5%) - concessional #GST rates extended till Dec 31, 2021
"There are some life-saving drugs not connected with Covid-19 but are very expensive, for which exemptions are being given. There wouldn't be GST on them - Zolgngelsma and Viltepso costing around Rs. 16 crore will now be exempted from GST," Sitharaman announced.
"We have seen in the last year and probably earlier that some life-saving drugs, which are not connected with Corona and are expensive. Exemptions have been given for such drugs, she added.
Sitharaman On Petrol, Diesel Under GST Ambit
Lastly, Sitharaman said that GST Council recommended that not to include petrol and diesel under GST ambit.
The Financial said that the GST Council did discuss the topic of inclusion of petrol and diesel under the tax structure after the Kerala High Court order. "On the direction of court it was brought on to table but members spoke very clearly they do not want it to be included in GST," Ms Sitharaman said.
Other Announcements:
* GST rates on Retro Fitment Kits for vehicles, used by persons with special disabilities, have also been reduced to 5 per cent.
* Additionally, GST rate on fortified rice kernels for schemes like integrated child development schemes have been recommended to be reduced from 18 per cent to 5 per cent.
* GST rate on biodiesel which is supplied to oil marketing companies for blending with diesel have also been reduced from 12 per cent to 5 per cent.
45th GST Council Meeting In Lucknow
The 45th GST Council meeting in Lucknow was attended by MoS Finance Pankaj Chaudhary and Finance Ministers of States and UTs, Ministry of Finance informed.
The Council, comprising central and state finance ministers, deliberated on the proposal of extending the existing concessional tax rate structure on Amphotericin B, Tocilizumab, Remdesivir and anti-coagulants like Heparin, till December 31, 2021, from the present September 30.
The tax rate on Amphotericin B, Tocilizumab was cut to 'Nil', while on Remdesivir and Heparin it was reduced to 5 per cent in June 2021.
The Council discussed the proposal of reducing GST from 12 per cent to 5 per cent to seven more drugs till December 31, 2021. These are Itolizumab, Posaconazole, Infliximab, Bamlanivimab & Etesevimab, Casirivimab & Imdevimab, 2-Deoxy-D-Glucose and Favipiravir.
As mentioned earlier, in a move to prevent tax evasion, the proposal to make food delivery platforms like Swiggy and Zomato liable to pay the Goods and Services Tax on restaurant services supplied through them was also considered by the Council.
Once approved by the GST Council, food delivery apps will have to collect and deposit GST with the government, in place of restaurants, for deliveries made by them. The end consumer will not suffer the extra tax burden.
As per estimates, tax loss to exchequer due to alleged under-reporting by food delivery aggregators is Rs 2,000 over the past two years, news agency PTI reported.
Meanwhile, in another important matter, the Council was also expected to discuss taxing petrol and diesel under the GST, a decision that will lead to huge compromises by both central and state governments on the revenues they collect from taxing these products.
In June, the Kerala High Court, based on a writ petition, asked the GST Council to decide on bringing petrol and diesel within the GST ambit.
Ahead of the meeting, Maharashtra Deputy Chief Minister Ajit Pawar on Thursday said the state government was against any move to encroach upon the state's rights to levy taxes.
Pawar, who holds charge of Maharashtra's finance department, told reporters here that said the Centre was free to levy taxes, but "what is under the state's jurisdiction should not be touched".
"If there is any move to do so, the state government will put forth its view in tomorrow's GST Council meeting," he said, as quoted by PTI.
Pawar said the central government should abide by all assurances made in Parliament when the Goods and Services Tax (GST) law of 'one nation one tax' was enacted.
"We are yet to get Rs 30,000 crore to 32,000 crore of our share of the GST refund. Apart from Excise and stamp duty, the largest pool of revenue for the state government is from the GST. Earlier this week, the Maharashtra government highlighted the state's issues regarding finances during discussions with the NITI Ayog members," he said.
Talking to PTI, Kerala Finance Minister K N Balagopal also said that the state will strongly oppose if there is any move to bring petrol and diesel under the GST regime.
He said the fuel prices skyrocketed due to the huge increase of its cess by the Centre and if the Union Government reduces the cess, that will help in bringing down the prices of petrol and diesel.
According to him, if petrol and diesel are brought under the GST regime, the state will lose Rs 8,000 crore annually.
Besides this, the council also reviewed and presented clarity over GST rates on 32 goods and 29 services.
The items under review are Zolgensma and Viltepso medicines for personal use, solar PV modules, copper concentrate, carbonated beverage with fruit juice, coconut oil, scented sweet supari, oncology medicine, and diesel-electric locomotives.
(With Agency Inputs)
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