Highlight and decision of GST council meeting
On 28th May 2021, the 43rd GST council meeting was held. The GST Council was chaired by Finance Minister Smt. Nirmala Sitharaman. Union Minister of State for Finance and Corporate Affairs, the Finance Ministers of the states and union territories (UTs), and other senior officers of both the Ministry of Finance and the States and UTs were also present.
Key Points 43 GST Council meeting
- Exemption on covid Item
- Amnesty Scheme
- Continuous issue of compensation
- Inverted tax structure
- GST on Medical essential
- Simplification of Annual Return
- Collaboration with WHO
- Other important points
- Exemption on covid Item
As a COVID-19 relief measure, a number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators other important things are have been recommended for full exemption from IGST
- Amnesty Scheme
FM Sitharaman announced an Amnesty Scheme to reduce late fee returns. Small taxpayers are allowed to file pending returns under this scheme. Small taxpayers constitute 89% of GST payers. Turnover of less than Rs 2 crore.
- Continuous issue of compensation
The rough estimate is that the Centre will have to borrow Rs 1.58 lakh crore, which will be passed on to states as loans. A special session will be held to discuss issues related to compensation cess alone.
At the session, a decision will be taken on whether the compensation cess will be extended beyond July 1, 2022, how it will be collected, etc.
- Inverted tax structure
The council had discussed an inverted tax structure. Inverted duty essentially refers to tax rates on inputs being higher than those of the finished products.
Many states have said that a course correction is required in this regard, particularly in sectors such as fertiliser, steel utensils, solar panels, tractors, tyres, electrical transformers, pharma, textile, cloth and railway locomotives.
- GST on Medical Essential
Recently, Sitharaman had clarified that doing away with the 5% GST on the vaccines will negatively impact the prices, and she explained that “manufacturers would be denied input tax credit who will, in turn, pass on this to the consumers as a cost”.
- Simplification of Annual Return for Financial Year
The filing of annual return in FORM GSTR-9 / 9A to be optional for taxpayers having aggregate annual turnover up to Rs 2 Crore.
- Collaboration with WHO
Lymphatic Filarisis (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%).
- Other Important
- Till 31st August 2021, Companies can continue filing GST returns using EVC instead of digital signature.
- The Quarterly Return Quarterly Payment (QRQP) scheme to be introduced based on the law committee’s suggestions and modalities worked out.