The Goods and Services Tax (GST) Council led by Finance Minister Nirmala Sitharaman decided to exempt IGST on import of free COVID-related supplies till August 31. Sitharaman said that the council decided to put Amphotericin B, a key medicine for the treatment of black fungus, in the list of items exempted from IGST.
The GST Council met after a gap of seven months. Sitharaman said that the council was unable to meet in between due to the budget session and assembly elections in five states. She said that several decisions were taken during Friday’s meeting.
This was the first meeting of the GST Council in the financial year 2021-22. The council’s last meeting was held in October last year.
The finance minister further said that like last year, the GST Council felt that this is not the appropriate time for a correction in Inversion duty, so this remains where it is.
Sitharaman also announced the GST Amnesty Scheme, which she said will provide relief to small taxpayers. The amnesty scheme has been recommended for reducing late fees. It is likely to benefit around 89 per cent of GST taxpayers. They can file pending returns, avail benefits of the scheme, with reduced late fees.
She further said that late fees have also been rationalised. The maximum amount of late fee has been reduced and it will come into effect from future tax periods. This will provide long-term relief for small GST taxpayers.
Speaking about the Annual Return Filing, the finance minister said that it will continue to be optional for 2020-21, for the small taxpayers with turnover less than Rs 2 crore. The reconciliation statements for 2020-21 need to be furnished by the taxpayers with a turnover of Rs 5 crore or more.
She said that the Law Committee will look into issues involving Quarterly Return Filing and Quarterly Payment, the modalities need to be worked out.
Speaking on GST compensation cess, Sitharaman said the same formula as last year is to be adopted this year too. The rough estimate is that the centre will have to borrow Rs 1.58 lakh crore and pass it on to states.
The finance minister said that a special session of the GST Council will be held to discuss extending paying compensation to states beyond 2022.
Following the severe impact of the second wave of COVID-19 pandemic across the country during the past two months, many states had sought a reduction in GST rates on essential COVID-19 materials including key medicines, medical devices, vaccines and services.
Separately, reducing GST rates on two-wheelers and bringing natural gas into the ambit of GST were also reportedly on the agenda of today’s meeting.
Source – IndianExpress