GST Council Meeting Highlights: Import Of Covid-Related Items Exempted From IGST Till Aug. 31
A cardboard cut-out of Indian Prime Minister Narendra Modi, accompanied by a message on GST. (Photographer: Anindito Mukherjee/Bloomberg)

GST Council Meeting Highlights: Import Of Covid-Related Items Exempted From IGST Till Aug. 31

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The Goods and Services Tax Council met today for its first meeting in nearly seven months and decided on a slew of matters.

The biggest decision was on reducing the compliance burden on taxpayers, Finance Minister Nirmala Sitharaman, who chaired the 43rd meeting of the Council, said. To provide relief to small taxpayers, an amnesty scheme has been recommended for reducing late fee, she said. This is likely to benefit around 89% of those who pay GST.

The issue about extending the GST Compensation period, which was widely expected to dominate the discussions, will be taken up at another meeting, Sitharaman said.

Key Highlights

  • Import of Covid-related relief items exempt from IGST till Aug. 31.
  • AmphotericinB, used for treating Mucormycosis, will also be exempt from IGST.
  • Group of ministers to review exemption requests on further Covid-related items like vaccines and ventilators. GoM to be constituted tomorrow.
  • Annual return filings will continue to be optional for small taxpayers for FY21.
  • Rate decisions on items ranging from MRO units of ships to shipping to annuity payments received as deferred payment for construction of road. (Read more here)
  • Compensation cess payable to states this year is Rs 2.7 lakh crore of which Rs 1.58 lakh crore will be given to them via back-to-back loans. Same formula as last year to apply. (Read more here)
  • Separate meeting to be held to discuss states' demands regarding extension of compensation period beyond FY22. (Read more here)

Read on for more details on the decisions or watch the full press conference live here.

Group Of Ministers To Decide On Rates Of Vaccines, Ventilators

A group of ministers will be formed to review the GST rates on Covid-19 vaccines, ventilators, medical-grade oxygen and certain diagnostic test kits.

The GoM, which will be formed tomorrow, will have to submit its report by June 8. The group will decide on any new rates, exemptions or further reduction on specific items.

Changes To Clarify Usage Of GST Credit By Land Owner Promoters

The GST Council said it will make appropriate changes to clarify that land owner promoters can utilise credit of GST charged to them by developers with respect of apartments that are subsequently sold by the land promoter and on which GST is paid.

The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate, it said.

GST On Deferred Annuity Payments For Construction Of Roads

The council clarified that GST will be payable on annuity payments that are recieved as deferred payment for the consutrction of roads.

The benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge, it said.

Decision On Milling Services To Governments Under PDS Programme

The council also clarified that any milling services of wheat, rice or paddy provided to governments for distribution of flour or rice under the Public Distribution Scheme would be exempt from GST if the value of goods in composite supply does not exceed 25%.

Otherwise, such services would attract GST at the rate of 5% if supplied to any person registered in GST, including a person registered for payment of TDS, it said.

GST Council Reccomends Lower Rates For Maintenance, Repair For Ships

THe Goods and Services Tax council has recommended that rates on the maintenance, repair and operations of ships and vessels be reduced to 5% from the existing 18%.

The point of sale for the B2B supply of these MRO services for ships and vessels would be considered as the location of recipient of service, it said.

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