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Introduction

The 45th GST Council Meeting was held on 17th September, 2021 under the chairmanship of Honorable Finance Minister Smt. Nirmala Sitharaman. The said Meeting took place at Lucknow, Uttar Pradesh. The meeting was attended by MOS Shri Pankaj Chaudhri besides Finance Ministers of States & UTs and Senior officers from Union Government & States. Also, it is important to note here that this was the first in person meeting that happened in the last two years. Let us have a look at the outcome of the 45th GST Council Meeting Held on 17.09.2021.

Concession on Specified drugs

  • The GST Council has extended the concessions on on all the COVID 19 related specified drugs till 31st December, 2021. However, the Finance Minister in 45th GST Council meeting clarified that that this extension shall only include medicines and not the other COVID 19 related medical equipment.
  • Drugs used for treating muscular atrophy namely Zolgensma and Viltepso are now under the purview of exempted category under GST. These are considered to be life-saving drugs. Also, the import of any such drug for personal use shall not attract IGST.
  • Also, for the medicines used in the cancer treatment, the GST council cuts tax rates from 12% to 5%.
Highlights of 45th GST Council Meeting dated 17th September, 2021

Zomato and Swiggy to pay GST

  • Two major food delivery apps namely Zomato and Swiggy are now required to pay GST with effect from 1st January 2022 as per the final decision and suggestion from the fitment committee. The time till January 2022 has been given to make changes in the software.

E-commerce Operators to pay taxes on services

E-Commerce Operators are being made liable to pay tax on the following services provided through them:

  • Transport of passengers, by any type of motor vehicles through it w.e.f. 1st January, 2022.
  • Restaurant services provided through it with some exceptions w.e.f. 1st January, 2022.
 

Clarifications with regard to the GST rate on goods and Services

Goods / Items

GST Rate

Pure henna powder and paste (that have no additives)

5%

Brewers' Spent Grain (BSG), Dried Distillers' Grains with Soluble [DDGS] and other such residues, falling under HS code 2303

5%

Laboratory reagents and other goods falling under heading 3822

12%

Scented sweet supari and flavoured and coated Elaichi falling under heading 2106

18%

Carbonated fruit beverages of fruit drinks and carbonated beverages with fruit juice

28% and cess of 12%

Tamarind seeds fall under heading 1209

Nil for seeds used for sowing, otherwise 5%

External batteries sold along with UPS systems/inverter

28%, other than lithium-ion batteries

UPS/inverter

18%

Paper and paperboard containers, whether corrugated or non-corrugated

18%

Fresh/dried nuts

5% / 12%

Pharmaceutical goods falling under heading 3006

12%

Services

 

Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities”

Exempt

Services by cloud kitchens/central kitchens are now covered under ‘restaurant service'

5%

Ice cream by parlours

18%

Overloading charges at toll plazas

Exempt

Renting of vehicles by state transport undertakings and local authorities is now covered by the expression ‘giving on hire'

Exempt

Grant of mineral exploration and mining rights

18%

Admission to amusement parks with rides, etc.

18%

Admission to facilities that have casinos

28%

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

NA

 

Decision on Compensation Cess

On the issue of compensation scenario, a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 2020-21 and 2021-22. In this context various options, as have been recommended by various committees/ forums were presented.

The Council deliberated at length on the issue. The Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors; rationalize the rates and review exemptions from the point of view of revenue augmentation, from GST. It was also decided to set up a GoM to discuss ways and means of using technology to further improve compliance including monitoring through improved e-way bill systems, e-invoices, FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the States.

Also Read: Key Highlights of the 45th GST Council Meeting

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