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Current Affairs

GST council key decisions

Date: 20 September 2021 Tags: Miscellaneous

Issue

The Goods and Services Tax (GST) Council meeting has announced key changes to the tax rates on essential products.

 

Background

This is the first in-person meeting of the council in 20 months. The meeting was held in Lucknow, Uttar Pradesh.

 

Details

  • The council has decided to keep imposing compensation cess on products for repayment of borrowed amounts.

  • There was also a discussion to bring petroleum products under the GST ambit. The idea was however dropped for now.

 

Key decisions

  • Concessional rates for medicines such as Remdesivir, Amphotericin, Tocilizumab and anti-coagulants like Heparin have been extended till December 31st.

  • Other Covid-19 treatment drugs such as Favipiravir, Itolizumab, Infliximab, Posaconazole, Casirivimab & Imdevimab, 2-Deoxy-D-Glucose, Bamlanivimab & Etesevimab have been brought under reduced rates.

  • Rate on fortified rice kernels have been reduced to 5 per cent from 18 per cent and on bio-diesel for blending in diesel to 5 per cent from 12 per cent.

  • Rates on ores and concentrates of metals such as iron, copper, aluminum etc has been increased from 5 per cent to 18 per cent, and that on certain renewable energy devices and parts from 5 per cent to 12 per cent.

 

Other important decisions

  • To service the borrowing, the levy of compensation cess will continue from July 2022 onwards till March 2026.

  • The compensation mechanism had to be financed through borrowing to meet the compensation amount deficit.

 

New development

  • The council has decided to levy GST on e-commerce operators engaged in restaurant delivery services. A rate of 5% is levied on all such delivery.

  • The council will set up a committee to look into the issue of inverted tax structure for footwear and textile sectors. The decision will be taken after January.