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GST Council meeting: Arunachal Pradesh supports Sikkim's proposal for seeking of concurrence for levy of COVID Cess on power and pharmaceutical sector


Arunachal Pradesh supported Sikkim’s proposal for seeking of concurrence for levy of COVID Cess on power and pharmaceutical sector in the state.

Arunchal Pradesh Deputy Chief minister in charge of finance department, Chowna Mein said on the agenda item regarding seeking of concurrence for levy of COVID Cess on power and pharmaceutical sector in Sikkim, we supported the proposal of the Sikkim that they may be allowed to levy COVID cess and also urged that Small states like Arunachal Pradesh may also be allowed to levy cess as it is also a financially crunch State and has to depend on Centre for 90% of its finances. Goa also supported this proposal and thereafter Chairperson assured to form a committee of Group of Ministers (GOM) as done earlier for allowing levy of cess for floods in Kerala.

The 43rd GST Council meeting was held in virtual mode today under the chairman of Nirmala Sitharaman, Union Finance Minister. While deliberating in the meeting Deputy Chief Minister, Shri Chowna Mein informed the august house that Arunachal Pradesh agrees in principle the decisions of the GST Implementation Committee (GIC) like reduction in late fee for non-filing of FORM GSTR-4 for the quarterly tax periods from July 2017 to March 2019 & FORM GSTR 10 – One-time amnesty to clean up pendency in return filing in GST regime, Extension of due date for filing Annual Return for Financial Year 2018-19, enabling provision for power to exempt issuance of e-invoice on the recommendation of the Council and related issues, rule amendments for the smooth implementation of e-invoice, amendment of other rules, to reduce IGST on oxygen concentrator imported for personal use, falling under heading 9804, from 28% to 12% and to bring the rate at par with commercial imports of ‘oxygen concentrators’. The concessional rate of IGST on such imports shall apply up to 30th June, 2021.

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On the proposal of the Fitment Committee to reduce GST on Medical Oxygen, Oxygen Concentrators and other oxygen generating equipment, Pulse Oximeters and Covid Testing Kit from 12% to 5% till 31.07.2021, the house saw diverse views on the issue and at that point of time, Mein proposed for acceptance of Fitment committee and also urged that the date may be extended for a further period. Later on the house approved for formation of committee of Group of Ministers (GOM) as there was no consensus on the issue and Chairperson requested the GOM to submit report within 8 days and till such time the rates proposed by the Fitment Committee will be applicable and the concession has been extended till 31.08.2021.

On the issue of applicability of Goods and Services Tax on Extra Neutral Alcohol (ENA), Mein strongly observed that ENA be kept outside the ambit of GST as this would result in loss of revenue as presently State is levying VAT on ENA. Moreover, power of taxing alcoholic beverages for human consumption is vested with State and ENA is primary an input for manufacture of alcoholic beverages for human consumption. Further, such a move will hamper developmental activities as State is already facing financial crunch due to limited states own resources.

To justify his view, DCM informed the august house that Arunachal Pradesh is geographically a big State but sparsely populated and it’s challenging to reach out to the remote parts of the State for any developmental works without states own resources as central fund is meant for specific schemes or projects and therefore State humbly requests to maintain status quo on ENA. Most of the States were of the view that taxation of ENA be left out to the States. House unanimously agreed to maintain the status quo for the time being.

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