The first in-person meeting of the GST Council, after the pandemic era of COVID was held on 17th September, 2021 at Lucknow. It was the 45th GST Council Meeting and was chaired by the Finance Minister Smt. Nirmala Sitharaman.
Highlights of the 45th GST Council Meeting:
Not restaurants but Swiggy, Zomato to pay GST to government
Online food delivery firms Swiggy and Zomato will now be liable to pay good and services tax to the government following a decision taken at the GST Council meet on September 17. The Finance Minister also clarified that there will be no new or additional tax on food supplied through Zomato, Swiggy and others.
Also Read: Major Takeaways Of 43rd GST Council Meeting
GST exemption on COVID-19 essential medicine extended till December
The GST Council has extended the GST rate cuts on COVID-19 essential items till 31 December, 2021 from 30 September, 2021. However, the latest extension only includes medicines and not other medical equipment. The dates have been extended keeping in mind the continuing demand for these medicines. The medicines with the applicable GST Rates are as follows:
| Medicine | GST Rate |
|---|---|
| Amphotericin B | NIL |
| Remdesivir | 5% |
| Tocilizumab | NIL |
| Anti-coagulants like Heparin | 5% |
| Posaconazole | 5% |
| Infliximab | 5% |
| Itolizumab | 5% |
| Favipiravir | 5% |
| Casirivimab & Imdevimab | 5% |
| 2-Deoxy-D-Glucose | 5% |
| Bamlanivimab & Etesevimab | 5% |
Non inclusion of petrol and diesel under GST
The Finance Minister stated that it is not the right time to include petrol and diesel under the GST regime. Therefore, for now, petrol and diesel have again.
Measure for streamlining compliances in GST
1. Aadhaar authentication of registration to be made mandatory for being eligible for filing refund claim and application for revocation of cancellation of registration.
2. Late fee for delayed filing of FORM GSTR-1 to be auto-populated and collected in next open return in FORM GSTR-3B.
3. Refund to be disbursed in the bank account, which is linked with same PAN on which registration has been obtained under GST.
4. Rule 59(6) of the CGST Rules to be amended with effect from 01.01.2022 to provide that a person shall not be allowed to furnish FORM GSTR-1. Moreover, if he has not furnished the return in FORM GSTR-3B for the preceding month.
5. Rule 36(4) of CGST Rules, 2017 to amend, once the proposed clause (aa) of section 16(2) of CGST Act, 2017 is notified, to restrict availment of ITC in respect of invoices/ debit notes, to the extent the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B.
Also Read: Do You Know About GST Refunds?
GST Council has also recommended amendments in certain provisions of the Act and Rules.
Major recommendations on GST rate changes in relation to Goods [w.e.f 1.10.2021 unless otherwise stated]
| Particulars | GST Rate |
|---|---|
| Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities” | Exempt |
| Services by cloud kitchens/central kitchens are now covered under ‘restaurant service’ | 5% |
| Ice cream by parlours | 18% |
| Overloading charges at toll plazas | Exempt |
| Renting of vehicles by state transport undertakings and local authorities is now covered by the expression ‘giving on hire’ | Exempt |
| Grant of mineral exploration and mining rights | 18% |
| Admission to amusement parks with rides, etc. | 18% |
| Admission to facilities that have casinos | 28% |
| Alcoholic liquor for human consumption is not food and food products’ for the entry prescribing the 5% GST rate on job work services in relation to food and food products. | NA |
Other changes relating to GST rates on Goods
Other changes relating to GST rates on goods
1. Supply of mentha oil from unregistered person has been brought under reverse charge. Furthermore, Council has also recommended that exports of Mentha oil should allow only against LUT and consequential refund of input tax credit.
2. Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks.
Correction in Inverted Duty structure in Footwear and Textiles sector
GST rate changes in order to correct inverted duty structure, in footwear and textiles sector, as was discussed in the earlier GST Council Meeting was deferred for an appropriate time, will be implemented w.e.f., 01.01.2022.
Major GST changes in relation to rates and scope of exemption on Services [w.e.f 1.10.2021 unless otherwise stated]
| Particulars | GST Rate |
|---|---|
| Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities” | Exempt |
| Services by cloud kitchens/central kitchens are now covered under ‘restaurant service’ | 5% |
| Ice cream by parlours | 18% |
| Overloading charges at toll plazas | Exempt |
| Renting of vehicles by state transport undertakings and local authorities is now covered by the expression ‘giving on hire’ | Exempt |
| Grant of mineral exploration and mining rights | 18% |
| Admission to amusement parks with rides, etc. | 18% |
| Admission to facilities that have casinos | 28% |
| Alcoholic liquor for human consumption is not food and food products’ for the entry prescribing the 5% GST rate on job work services in relation to food and food products. | NA |
– Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn
– E Commerce Operators are being made liable to pay tax on following services provided through them
i. transport of passengers, by any type of motor vehicles through it [w.e.f. 1 January, 2022]
ii. restaurant services provided through it with some exceptions [w.e.f. 1 January, 2022]
– Certain relaxations have been made in conditions relating to IGST exemption relating to
import of goods on lease, where GST is paid on the lease amount, so as to allow this exemption even if (i) such goods are transferred to a new lessee in India upon expiry or termination of lease; and (ii) the lessor located in SEZ pays GST under forward charge.
Clarification in relation to GST rate on goods
Clarification in relation to GST rate on Goods
1. Pure henna powder and paste, having no additives, attract 5% GST rate under Chapter 14.
2. Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other such residues, falling under HS code 2303 attract GST at the rate of 5%.
3. All laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%.
4. Scented sweet supari and flavored and coated illachi falling under heading 2106 attract GST at the rate of 18%
5. Carbonated Fruit Beverages of Fruit Drink” and “Carbonated Beverages with Fruit Juice” attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate schedule.
6. Tamarind seeds fall under heading 1209, and hitherto attracted nil rate irrespective of use. However, henceforth they would attract 5% GST rate (w.e.f. 1.10.2021) for use other than sowing.
7. External batteries sold along with UPS Systems/ Inverter attract GST rate applicable to batteries [28% for batteries other than lithium-ion battery] while UPS/inverter would attract 18%.
8. GST on particular Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, during the period from 1.7.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 1 January 2019.
9. Due to ambiguity in the applicable rate of GST on Fibre Drums, the supplies made at 12% GST in the past have been regularised. Henceforth, a uniform GST rate of 18% would apply to all paper and paper board containers, whether corrugated or non-corrugated.
10. Distinction between fresh and dried fruits and nuts is being clarified for application of GST rate of “nil” and 5%/12% respectively;
Also Read: Myths And Facts Associated With GST
clarification in relation to GST rate on services
Clarification in relation to GST rate on services
1. Coaching services to students under the central sector scheme of ‘Scholarships for students with Disabilities” is exempt from GST
2. Services by cloud kitchens/central kitchens are covered under ‘restaurant service’, and attract 5% GST [ without ITC].
3. Ice cream parlor sells already manufactured ice- cream. Such supply of ice cream by parlors would attract GST at the rate of 18%.
4. Overloading charges at toll plaza are exempt from GST being akin to toll.
5. The renting of vehicle by State Transport Undertakings and Local Authorities is covered by expression ‘giving on hire’ for the purposes of GST exemption
6. The services by way of grant of mineral exploration and mining rights attracted GST rate of 18% w.e.f. 01.07.2017.
7. Admission to amusement parks having rides etc. attracts GST rate of 18%. Moreover, the GST rate of 28% applies only to admission to such facilities that have casinos etc.
8. Alcoholic liquor for human consumption is not food and food products for the purpose of the entry prescribing 5% GST rate on job work services in relation to food and food products.
Click here to download all recommendations of the 45th GST council meeting in PDF format.
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