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44th GST Council Meeting Highlights dt.12.06.2021

Outcome of 44th GST Council Meet

The 44th GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt. NirmalaSitharaman via video conferencing today i.e. 12th day of June, 2021, Saturday, via video conferencing in New Delhi.

Union minister of state (MoS) for finance Anurag Thakur and finance ministers of states and Union territories (UTs) are also attending the virtual meeting, which is being held to finalise modalities to compensate states for their revenue shortfall of Rs 2.35 lakh crore in the current financial year.

Proposal at this meeting: To reduce the GST rates on the specified items being used in Covid-19 relief and management like hand sanitisers, face masks, gloves, PPE Kits, temperature scanners and others and to take a decision on relief in respect of COVID-19 related individual items based on the report of Group of Ministers.

Previous Meeting (43rd GST Council Meeting): It held on 29th day of May, 2021, where the GST Council referred the decision over the tax rates on COVID vaccines to a group of ministers (GoM) and took several decision to help the industries affected by Covid-19.The Council had also decided in previous meeting to reduce the compliance burden of small taxpayers and medium-sized taxpayers and recommended an amnesty scheme for reducing late fee payable, to provide relief to small taxpayers.

  • 44thGST COUNCIL MEETING KEY HIGHLIGHTS
  1. The tax rate on ventilators, medical grade oxygen, COVID-19 testing kits, oxygen concentrators and BiPAP machine have been brought down to 5 percent from 12 percent at present.
  2. The GST on anti-coagulants like Heparin, high flow nasal canula (HFNC) device and pulse oximeters has been reduced to 5 percent from 12 percent at present.
  3. The GST on hand sanitisers and temperature check equipment has been reduced to five percent from 18 percent at present.
  4. 5% GST on vaccines will stay.
  5. “GST rates have been decided for 4 categories of products- medicines, oxygen, oxygen-generation equipment, testing kits and other machines and other COVID19 related relief material.
  6. GST Council approved all recommendations of GoM on rate rationalisation.GST on ambulances reduced to 12 percent.
  7. The Centre will buy the 75 per cent vaccine as announced and will pay its GST too. But 70 per cent of income from GST will be shared with States.
  • The details of recommendations on GST Rates are given below :
S. No.DescriptionPresent GST RateGST Rate recommended by GST Council
Medicines
1.Tocilizumab5%Nil
2.Amphotericin B5%Nil
3.Anti-Coagulants like Heparin12%5%
4.Remdesivir12%5%
5.Any other drug recommended by Ministry of Health and Family Welfare (MoHFW) and Dept. of Pharma (DoP) for Covid treatmentApplicable Rate  5%
Oxygen, Oxygen generation equipment and related medical devices
1.Medical Grade Oxygen12%5%
2.Oxygen Concentrator/ Generator, including personal imports thereof12%5%
3.Ventilators12%5%
4.Ventilator masks / canula / helmet12%5%
5.BiPAP Machine12%5%
6.High flow nasal canula (HFNC) device12%5%
Testing Kits and Machines
1.Covid Testing Kits12%5%
2.Specified Inflammatory Diagnostic Kits, namely D-Dimer, IL-6, Ferritin and LDH12%5%
Other Covid-19 related relief material
1.Pulse Oximeters, incl personal imports thereof12%5%
2.Hand Sanitizer18%5%
3.Temperature check equipment18%5%
4.Gas/Electric/other furnaces for crematorium, including their installation, etc.18%5%
5.Ambulances28%12%
  • Validity of this revised rates:

The new rates will remain in effect till September 30, 2021 and can be extended further upon nearing the deadline.

Source: Press Release / Twitter

About the Author:

CS LALIT RAJPUT

Company Secretary having 6+ years of post qualification experience in the Compliance Management Services industry by serving Corporates including Listed Companies, Corporate Secretarial Firms and LLP. He is an active blogger and author at various platforms including Taxmann, Caclubindia, Tax Concept, Compliance Calendar LLP, in studycafe,Taxguru, Ipleaders etc. He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.

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Sitharaman to chair 43rd GST Council meeting on May 28

Smt @nsitharaman will chair the 43rd GST Council meeting via video conferencing at 11 AM in New Delhi on 28th May 2021. The meeting will be attended by MOS Shri @ianuragthakur besides Finance Ministers of States & UTs and Senior officers from Union Government & States.

Other key issues pending before the Council include rationalisation of GST rate slabs, correction of inverted duty on certain items and inclusion of petroleum products, etc.

In fact, states also want to discuss extension of the GST compensation issue beyond July 2022 in the Council as economic uncertainty continues Several states have accused the Centre for violating the constitutional mandate of convening GST meeting at least once every quarter.

Outcome of 42nd GST Council Meeting Held on 05.10.2020

Outcome of 42nd GST Council Meeting Held on 05.10.2020

The GST Council has made the following recommendations: 

(1.) Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.

(2.) Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week.

(3.) Enhancement in features of return filing: In its 39th Meeting held in March 2020, the Council had recommended an incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved framework aims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by a taxpayer and his suppliers would –(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B)through the data filed by the taxpayer and all his suppliers. In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal. To this end the Council recommended / decided the following:

(a.) Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 01.1.2021;

(b.) Roadmap for auto-generation of GSTR-3B from GSTR-1s by:

(i.) Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and

(ii.) Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;

(c.) In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR-1 would be mandatorily required to be filed before FORM GSTR-3B w.e.f. 01.04.2021.

(d.) The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.

(4.) As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan. 

(5.) Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1 w.e.f. 01.04.2021 as under:

(a.) HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;

(b.) HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover up to Rs. 5 crores;

(c.) Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.

(6.) Amendment to the CGST Rules: Various amendments in the CGST Rules and FORMS have been recommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.

(7.) Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021. 

(8.) To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.

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Big decision of GST Council, Compensation cess to be held even after 2022

According to sources, it has been decided that the Compensation Cess on luxury and many other items will be extended from June 2022. This decision has been taken to protect the states from harm.

According to the rule, this was to take only five years after the GST came into force. States are demanding from the Central Government to give the outstanding compensation of GST of about Rs 2.35 lakh crore. In return, the Center has given them two options to borrow. But the states are divided about this offer of the Center.

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