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GST Council Meeting Updates: Exemption on Imported COVID-Related Supplies Till August 31; Amnesty Scheme and More

The GST Council on Friday left taxes on COVID-19 vaccines and medical supplies unchanged but exempted duty on import of a medicine used for treatment of black fungus

News18.com | May 28, 2021, 21:50 IST

GST Council Meeting Updates: Union finance minister Nirmala Sitharaman chaired the Goods and Services Tax (GST) Council meeting on Friday, after a gap of seven months. With the second wave of coronavirus pandemic ravaging the country, several states urged a reduction in GST rates on essential COVID-19 supplies including various medicines, medical devices, and health services.

The GST Council on Friday left taxes on COVID-19 vaccines and medical supplies unchanged but exempted duty on import of a medicine used for treatment of black fungus. Sitharaman said the GST Council decided to continue a waiver of IGST on free COVID-19 related supplies imported from abroad.

The GST Committee decided that the Centre will borrow Rs 1.58 lakh crore and pass it on to the states to make up for the shortfall in their revenues from the implementation of the GST. A special session of the Council will be held soon to consider extending the five-year GST shortfall compensation period to states beyond 2022.

May 28, 2021 21:50 (IST)

Key decision in today's GST meet

To support the LympahticFilarisis (an endemic) elimination programme being conducted in collaboration with WHO, the GST rate on Diethylcarbamazine (DEC) tablets has been recommended for reduction to 5% (from 12%).

May 28, 2021 21:35 (IST)

Special Session of the Council on GST shortfall: FM

GST panel decided that the Centre will borrow Rs 1.58 lakh crore and pass it on to the states to make up for the shortfall in their revenues from the implementation of the GST.

A special session of the Council will be held soon to consider extending the five-year GST shortfall compensation period to states beyond 2022.

May 28, 2021 21:22 (IST)

Filing form GSTR 9 will be optional for small taxpayers  

 Vivek Jalan, Partner, Tax Connect Advisory Services LLP explained: The format of annual return FY 2020-21 in Form GSTR 9 was much awaited by Trade and Industry. From this year GST Audit and Reconciliation Statement in Form GSTR 9C is withdrawn and Form GSTR 9 may be more elaborate to include some reconciliation tables also. Further it needs to be self-certified by the CFO/Tax Head/Management Personnel. The due date of filing GSTR 9 is 31st December 2021 and therefore it is a welcome move that the GSTR 9 is out and Trade & Industry get adequate time to prepare and file it.

It may be noted that filing GSTR 9 is the last opportunity a taxpayer gets to rectify any mistakes done during the financial year and should be prepared with great care. The GST Department may issue notices incase any inconsistency is detected by its data analytics Wing in the GSTR 9.

Filing form GSTR 9 will be optional for small taxpayers though.   

May 28, 2021 21:20 (IST)
GST Council Meeting Today: Amnesty Scheme to Reduce GST Late Fee; Other Key Decisions

In a bid to provide relief to small and medium taxpayers amid the second wave of coronavirus pandemic, finance minister Nirmala Sitharaman announced a special amnesty scheme on Friday.

May 28, 2021 21:17 (IST)

 Experts on the outcome of 43rd GST Council Meeting

"The announcements regarding reduction of late fee and the amnesty scheme for small taxpayers who might be unable to file their returns on time is a welcome move," said Mahesh Jaising, Partner, Deloitte India

May 28, 2021 21:09 (IST)

On Amnesty Scheme on Waiver or Reduction of Late Fees for Late Filing of GST Returns

"As expected the GST Council has approved a ln Amnesty Scheme on Waiver/reduction of Late Fees for Late filing of GSTR 1 and GSTR 3B. However it would have been fair if the late fees which is refunded for those who have already paid and filed the return. It is important to note that the GST Portal does not allow filing of GST Returns before payment of Late fees," said Vivek Jalan, Partner, Tax Connect Advisory Services LLP. 

May 28, 2021 20:55 (IST)

Annual Return filing will continue to be optional for FY 2020-21: FM

The Annual Return filing will continue to be optional for FY 2020-21 for small taxpayers, having a turnover less than Rs 2 crores while reconciliation statements for 2020-21 will be furnished only by those taxpayers whose turnover is Rs 5 crores or more, says finance minister Nirmala Sitharaman. 

May 28, 2021 20:46 (IST)

Amnesty Scheme for Announced Taxpayers

FM said that the biggest decision taken today was about reducing compliance burden on the taxpayers. 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. Taxpayers can file pending returns and avail benefits of scheme with reduced late fee. Even late fee has been rationalized.

May 28, 2021 20:43 (IST)

Taxpayers can now file their pending returns: FM

Taxpayers can now file their pending returns and avail the benefits of this Amnesty scheme with reduced late fees: Finance Minister Nirmala Sitharaman

May 28, 2021 20:41 (IST)

Amnesty Scheme to Benefit 89% of GST Taxpayers: FM

In order to provide relief to the small taxpayers, an amnesty scheme has been recommended for reducing late fees payable. This will benefit around 89% of GST taxpayers. They can now file their pending returns and avail benefits of scheme, with reduced late fees, said Finance Minister. 

May 28, 2021 20:38 (IST)

Will Have a Special Session only on Compensation Cess: FM

Union Finance Minister Nirmala Sitharaman said she has assured the members there will be a special session only on compensation cess matter beyond July 2022. "Rs 1.58 lakh crore worth of compensation numbers worked out. We will give the money as back-to-back loans to states," said FM. 

May 28, 2021 20:35 (IST)

Adhoc exemptions have been given for COVID-related equipment: FM

Adhoc exemptions have been given for COVID-related equipment. The council has decided to exempt the import of many of these items with exemption extended to August 31, 2021, says FM 

May 28, 2021 20:29 (IST)

Amphotericin B has also been included in the exemptions list: FM

Due to rising cases of black fungus, Amphotericin B has also been included in the exemptions list: FM Nirmala Sitharaman

May 28, 2021 20:28 (IST)

GST Council has decided to exempt the import of relief items till August 31: FM

Issues of COVID-related equipment was one of the items on the agenda that had a very detailed discussion. Many issues were raised & discussed....The Council has decided to exempt the import of relief items till 31st August 2021: FM Nirmala Sitharaman after  43rd GST Council meet. 

May 28, 2021 20:19 (IST)

Proposed to remove taxes on COVID-19 vaccine, oxygen cylinder, concentrator, oximeter, PPE kit: Manish Sisodia

"We proposed to remove taxes on COVID-19 vaccine, oxygen cylinder, concentrator, oximeter, PPE kit, sanitizer and other essential medical items. Many states including Punjab, Bengal, Kerala also sought same exemption," said Delhi deputy chief minister Manish Sisodia. 

May 28, 2021 19:36 (IST)

GST compensation shortfall estimated at Rs 2.69 lakh cr for FY22

The shortfall in GST compensation payable to states in the current fiscal is estimated at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be borrowed this year. The 2021-22 Budget had assumed 17 percent growth in GST revenues, translating into monthly gross GST revenue of Rs 1.1 lakh crore. Based on this assumption, it has been estimated that for the period February 2021 to January 2022, the gap between protected revenue and the actual revenue after release of compensation would be around Rs 1.6 lakh crore. 

May 28, 2021 19:10 (IST)

GST Council Meeting: FM to Address Media Soon

FM Nirmala Sitharaman to hold media briefing on the outcomes of meeting soon. This was the first GST meeting of this fiscal. 

May 28, 2021 18:05 (IST)

GST compensation shortfall  

The shortfall in GST revenues might rise to Rs 3 lakh crore and the compensation gap to Rs 2 lakh crore in the current fiscal. The compensation gap refers to the difference between the compensation required to be paid to states to make good any shortfall in GST revenue collections and the cess money collected and transferred to them.

May 28, 2021 17:29 (IST)

Trade Body Appeals to FM to Extend Time for Filing GSTR 3B

The local chapter of the Indian Chamber of Commerce and Industry also requested Union Finance Minister Nirmala Sitharaman to extend the time limit for filing of the GSTR 3B till June 26 as it would give great relief to tax-payers. The government has not extended the due date for filing of GSTR-3B for April 2021 for traders who have more than Rs five crore turnover, instead relief has been given to the tax-payers by way of nil or reduced interest for certain period of delay in discharging the tax liability, the Chamber said in a letter to the minister.

May 28, 2021 17:17 (IST)

Exempt GST on Covid Essentials, Bengal Urges Sitharaman

The West Bengal government earlier urged Union Finance Minister Nirmala Sitharaman for exemption of GST and customs duty on essential drugs, vaccines and equipment required for the treatment of Covid-19. In a letter to Sitharaman, state Finance Minister Amit Mitra also thanked her for convening the "much awaited" 43rd meeting of the GST Council on Friday.

"I propose that the Council in its wisdom, may agree to accept zero-rated tax for all Covid relevant materials, equipment, drugs and vaccines. This will allow manufacturers and their entire supply chain entrepreneurs to avail input tax credit. Therefore, there would be no adverse impact on prices for the consumers," Mitra said in his letter. 

He also told her that West Bengal chief minister Mamata Banerjee on May 9 had written to Prime Minister Narendra Modi, requesting him to waive all forms of taxes and customs duty on equipment and drugs being used to fight the COVID-19 pandemic.

May 28, 2021 17:02 (IST)
Agenda of 43rd GST Meeting  
Vivek Jalan, partner, Tax Connect Advisory Services LLP shared the agenda of 43rd GST Meeting  
1) Section 50(1) of The CGST Act for interest on late payment of GST on cash component only is expected to be passed at the GST Council meeting today as per Agenda Item No 9B(ii)

2)  QRMP Scheme may be amended from Quarterly return monthly payment to QRQP Quarterly return Quarterly Payment as per Agenda Item No 9B(iii)

May 28, 2021 17:01 (IST)
  

Agenda of 43rd GST Meeting  

Vivek Jalan, partner, Tax Connect Advisory Services LLP said, "Agenda 9A, 9B and 12 of The GST Council Meeting is very Important for businesses." 

The GST Council is deliberating on

1) Inverted Duty Structure on Textiles and Footwear may be amended as per Agenda Item No 12

2) The New Format of Annual Return in Form GSTR 9 is expected to be approved for FY 2020-21. From this year the GST Audit and Reconciliation Statement in Form GSTR 9C withdrawn. Hence Form GSTR 9 is expected to be more elaborate and it needs to be self-certified by the Management. The same may be issued as per as per Agenda Item No 9A(ii)

3) The GST Amnesty Scheme for waiver of Late Fees from July 2017 to April 2021 for waiver of Late Fees is expected to be passed, as per Agenda Item No 9A(i)

May 28, 2021 16:55 (IST)

GoM to Examine Levy of GST at Manufacturing Stage for Pan Masala, Brick Kilns Sectors

A state ministerial panel will look into the possibility of levying GST in evasion prone sectors like pan-masala, gutkha, and brick kilns on the basis of their manufacturing capacity. The seven-member Group of Ministers (GoM) under Odisha Finance Minister Niranjan Pujari will also examine charging GST on a reverse charge basis on mentha oil and other supplies to such sectors to check evasion.

The GoM on 'capacity based taxation and special composition scheme in certain sectors in GST' will submit its report to the GST Council within six months. The panel will "examine the possibility to levy GST based on the capacity of manufacturing unit and special composition schemes in certain evasion prone sectors like pan masala, gutkha, brick kilns, sand mining etc. with reference to the current legal provisions," as per the Terms of Reference (ToR).

May 28, 2021 16:28 (IST)

Zero-tax on COVID Vaccines, Drugs and Other Equipment? Committee Submits Report to Govt

GST Council in its meeting on Friday would take up for discussion proposal for cut in the tax rate on COVID medicines, vaccines and oxygen equipments. 

The committee comprising tax officers of centre and states, has also given its report to the council listing out the pros and cons of waiver and zero-rating of COVID vaccines, drugs and other equipment. Exempting final product from GST would deny manufacturers from claiming the benefit of the input tax credit on raw materials and hence not much benefit accrues to consumers, sources told.

May 28, 2021 16:00 (IST)

Imposing GST on essential medical products during a pandemic is cruel: Priyanka Gandhi Vadra

Imposing GST on essential medical products like oxygen, ventilators, vaccines and medicines during a pandemic is cruel and insensitive, said Congress leader Priyanka Gandhi Vadra. 

In today’s GST Council meet, the government should remove GST from all life saving medicins and equipment that are being used to fight Covid, she added. 

May 28, 2021 14:21 (IST)

GST Council to Discuss Sikkim's Proposal to Levy a COVID-19 Cess in the State

The GST Council is discussion Sikkim government's proposal to levy a COVID-19 cess in the state, sources told CNBC-TV18. Sikkim had proposed a nominal COVID cess for two years on the pharmaceutical and power sectors in the state.
The GST Council will constitute a Group of Ministers (GoM) to examine Sikkim's proposal, which will submit its recommendation on the matter to the Council in two weeks. The sources added that other states such as Arunachal Pradesh, Meghalaya and Goa may also propose levying a state COVID cess.

May 28, 2021 14:17 (IST)

On Exemption of GST on COVID-19 Drugs, Medical Devices

Saket Patawari, executive director–Indirect Tax, Nexdigm suggests: 

Under value added tax like GST, exemption may have negative impact as typically credit on inputs would not be available thus becoming a cost for the business. Further, it may result in disputes on which ones to be exempted and which ones should not be. Exempting the supply chain could be counter-productive. However, following measures can be undertaken by the Government to reduce the costs:

Customs duty exemptions - Basic Customs Duty (BCD) and Health Cess can be exempted on import of raw material etc., as provided to COVID-19 vaccines, medical-grade oxygen, oxygen related equipments;   

The GST supply chain can remain under tax at 5%. However, this can be separately refunded back to the manufacturers or the suppliers selling to unregistered customers, similar to the one allowed in case of exports but the current GST legislation may not allow such refund. Hence, it can be separately provided by the Government outside of GST legislation if we have to reduce the impact, like a special incentive package / scheme. This is subject to non-collection of said GST from such unregistered customers.

May 28, 2021 13:33 (IST)

GST Compensation Gap

The shortfall in GST revenues might rise to Rs 3 lakh crore and the compensation gap to Rs 2 lakh crore in the current fiscal. The compensation gap refers to the difference between the compensation required to be paid to states to make good any shortfall in GST revenue collections and the cess money collected and transferred to them.

May 28, 2021 12:51 (IST)

CAIT Seeks Extension of GST Return Filings Deadline

Traders' body CAIT on Thursday sought extension of the deadline for filing various GST returns till August. In a letter to finance minsister Nirmala Sitharaman CAIT urged the Centre to extend the date of filing of various GSTR returns till August under the GST Act and Rules, without late fee and interest.

It said that GST officers should not resort to cancellation of registrations at this time unless there are pressing reasons for doing so. Also, for all traders having turnover of below Rs 20 crore in a year, no survey or audits or special assessments should be ordered for the years 2017-18 and 2018-19, it added.

May 28, 2021 12:41 (IST)

Exemptions Likely on COVID Medical Devices: Expert 

“Individuals and companies importing oxygen concentrators, oxygen cylinders, regulators and rakes are looking up for exemptions/credits on these medical devices as in most of the cases the imports are in the public interest or for donation to state governments/ NGOs”, said Abhishek A Rastogi, partner at Khaitan & Co. “The issues of exporters need immediate attention and it is hoped that the decision will soon be taken on important issues such as fixation of rate of remission under RodTEP scheme, MEIS  issues related to 2020 for which the exporters are unable to apply, other Advance Authorisation issues”, said Rastogi added.

GST Council Meeting Updates: Exemption on Imported COVID-Related Supplies Till August 31; Amnesty Scheme and More
Union Finance Minister Nirmala Sitharaman

“There was no major announcements post the council meeting. The issue of GST reduction on Covid items has been deferred by a few more days which is dissapointing. Issue of inverted duty structure has also not been addressed. Few compliance related measures have been announced which should provide a temporary relief to small and medium tax payers. However, on overall basis, the council has failed to address major pain points of the industry and the common man resulting from the pandemic,” Rajat Bose, partner, Shardul Amarchand Mangaldas & Co.

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