A group of ministers will deliberate on tax structure on the vaccine and medical supplies, said Finance Minister Nirmala Sitharaman addressing the press.
The GST Council’s meeting, the first this year, comes at a time when the country is reeling under the second wave of coronavirus infections that have derailed the economic recovery. Though the council is required to meet once every quarter, the last meeting was held in October last year.
discussion at the meeting
1. Council has decided to exempt export of relief items and is being extended till August 31, 2021
2. Import of medicine for black fungus, that is Amphotericin B, has also been included in the exempted category.
3. Import of Covid-related relief items, even if purchased or meant for donating to government or to any relief agency upon recommendation of state authority, to be exempted from IGST till August 31, 2021.
4. FM Sitharaman announced Amnesty Scheme to reduced late fee returns. Small taxpayers can file pending returns under this scheme.
5. A Group of Ministers will be quickly formed who will submit their report within 10 days – on or before June 8, so that if there are any further reductions which need to be done will be done, in the sense, that rates will be decided by them.
Contentious issue of compensation cess
Nirmala Sitharaman said she has assured the members there will be a special session only on compensation cess matter beyond July 2022. “Rs 1.58 lakh crore worth of compensation numbers worked out. We will give the money as back-to-back loans to states,” said FM.
Inverted Tax Structure
The council had extentive talks on inverted tax structure. Inverted duty essentially refers to tax rates on inputs being higher than those levied on finished products. Several states have said that a course correction is required in this regard, particularly in sectors such as fertiliser, steel utensils, solar panels, tractors, tyres, electrical transformers, pharma, textile, cloth and railway locomotives.
GST on medical essentials
Recently, Sitharaman had clarified that doing away with the 5 percent GST on the vaccines will negatively impact the prices as “manufacturers would be denied input tax credit who will, in turn, pass on this to the consumers as a cost”.
Download The Economic Times News App to get Daily Market Updates & Live Business News.