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The 45th GST Council meeting was held on September 17, 2021 Friday at Lucknow, Uttar Pradesh chaired by Union Finance Minister Nirmala Sitharaman. The Council meeting was held physically for the first time after one and half year of COVID - 19.

MATTER DISCUSSED IN THE COUNCIL MEETING

  • Expensive life-saving drugs such as Zolgensma and Viltepso used to treat muscular atrophy are exempted from GST.
  • On the issue of the inverted duty structure, the correction in the footwear and textile sector anomalies will take from January 01, 2022.
  • Relaxes compliance requirements for ITC - 04
  • PAN/Aadhaar mandatory for certain facilities
  • GST on cloud Kitchen covered under Restaurant Service.
  • No Decision on bringing Petroleum Products under GST.
  • Pure Henna Powder, Laboratory Reagents, Carbonated Fruit Beverages of fruit drink, issues clarification on GST Rate.
  • GSTR 3B defaulters cannot file GSTR 1
  • Proposes changes in GST Rate for various Goods and Services w.e.f January 01, 2022

Expensive life-saving drugs such as Zolgensma and Viltepso used to treat muscular atrophy are exempted from GST

The GST Council has extended the COVID - 19 relief measures in form of GST Rate concessions to Amphotericin B, Remdedivir, life-saving drugs such as Zolgensma and Viltepso used to treat muscular atrophy, Tocilizumab, Anticoagulants like Heparin till December 31, 2021.

The Council also decided to reduce the GST rate to 5% on more COVID - 19 treatment drugs up to December 31, 2021 namely

  • Itolizumab
  • Posaconazole
  • Infliximab
  • Favipiravir
  • Casirivimab & Imdevimab
  • Deoxy - D - Glucose
  • Bamlanivimab & Etesevimab

On the issue of the inverted duty structure, the correction in the footwear and textile sector anomalies will take from January 01, 2022.

The GST Rate changes in order to correct inverted duty structure, in the footwear and textiles sector, as was discussed in earlier GST Council Meeting and was deferred for an appropriate time, will be implemented with effect from January 1, 2022.

The Council could not correct in the past, particularly during the last year due to the pandemic, because it would have had an adverse impact on either GST revenue collections or consumer prices of the finished products.

Relaxes compliance requirements for ITC-04

The GST Council has decided to relax the compliance requirements for filing of ITC - 04. As per the decision of the council, the return shall be filled once in six months by the taxpayers whose annual aggregate turnover in preceding financial year is above 5 Crore. For the Taxpayers whose annual aggregate turnover in preceding financial year is up to Rs 5 crore shall file return annually.

Brief about 45th GST Council Meeting

"Requirement of a filing FORM GST ITC - 04 under Rule 45(3) of the CGST Rules has been relaxed as under:

  • Taxpayers whose annual aggregate turnover in the preceding financial year is above Rs 5 Crore shall furnish ITC - 04 once in six months
  • Taxpayers whose annual aggregate turnover in the preceding financial year is up to Rs 5 Crore shall furnish ITC - 04 annually.

Further, the GST Council also resolved the ambiguities in the charging of interest under Section 50(3) of the CGST Act.

"In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50(3) of the CGST Act to be amended retrospectively, w.e.f 01.07.2017, to provide that interest is to be paid by a taxpayer on "ineligible ITC availed and utilized" and not on "ineligible ITC availed". It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f 01/07/2017.

"Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards.

PAN/Aadhaar mandatory for certain facilities

As per decision of the GST Council, Aadhaar Authentication of registration is to be made mandatory for being eligible for filing refund claims and application for revocation of cancellation of registration.

Further, the Council also decided that the GST Refund be disbursed in the bank account, which is linked with the same PAN on which registration has been obtained under GST.

GST on cloud Kitchen covered under Restaurant Service

The Services by cloud Kitchen/Central Kitchens are covered under ‘Restaurant Service’ and attract 5% GST (without ITC). Ice Cream Parlor sells already manufactured ice-cream would attract 18% GST.

Alcoholic liquor for human consumption is not food and food products for the purpose of entry prescribing 5% GST rate on job work services in relation to food and food products.

No Decision on bringing Petroleum Products under GST

"In terms of the recent directions of the Hon’ble High Court of Kerala, the issue of whether specified petroleum products should be brought within the ambit of GST was placed for consideration before the Council".

Pure Henna Powder, Laboratory Reagents, Carbonated Fruit Beverages of fruit drink, issues clarification on GST Rate

As per the Clarifications by the GST Council pure Henna Powder paste, having no additives, attract a 5% GST rate under Chapter 14.

Further, all laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%. Scented sweet supari and flavored and coated illachi falling under heading 2106 attract GST at the rate of 18%.

Carbonated fruit beverages of fruit drink and carbonated beverages with fruit juice attract a GST Rate of 28% and cess of 12%.

 

GSTR 3B defaulters cannot file GSTR 1

The Council with the objective to streamline the GST Compliance, the Registered Person shall not be allowed to furnish GSTR 1, on his failure to furnish the return GSTR 3B.

Further, the late fees for delayed filing of GSTR 1 to be auto populated and collected in the next open return in GSTR 3B.

Proposes changes in GST Rate for various Goods and Services w.e.f January 01, 2022

GOODS

GST RATE

Amphotericin B, Tocilizumab

NIL

Remdesivir

5%

Fortified Rice Kernels

5%

Bio Diesel

5%

Iron, Copper, Aluminium, Zinc

18%

Carton Boxes, Bags, Packing Containers of paper

18%

Waste & Scrap of Polyurethanes and other plastics

18%

Supply of Mentha Oil from unregistered

Reverse Charge Mechanism (RCM)

 

AUTHOR VIEW

As per Recent GST Council Meeting, the Government want the Taxpayer to compliant and also wants to reduce the compliance burden. But according to the recent changes in GST Rates some Items will be going to cheaper like medicines etc and some items are going to be costlier which ultimately going to effect the pocket of a common man, which will lead to inflation in the market Government should look into the matter rather than focusing on their Revenue.

DISCLAIMER: The views expressed in this article are those of individual author’s writing in his individual capability only. The information provided in this article does not intend to constitute legal advice, instead all the information, content, and all the materials available in this article are for general purpose only. Readers of this article should contact their attorney to obtain advice with respect to any particular legal matter.

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