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.
“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.