New Delhi: The 43rd meeting of the GST Council was held on Friday at the request of finance ministers of state governments to discuss Covid-related policy. The meeting was chaired by Finance Minister Nirmala Sitharaman through video conferencing. In this meeting of GST Council held after 7 months, the Covid epidemic was discussed in detail and 7 important decisions were taken in it. The most important of these decisions was that the Center agreed to allow states to exempt imports from abroad on Covid Related Medical Equipments.
It has been decided to give exemption on IGST on free covid related supplies till 31 August. The Finance Minister said that black fungus drug Amphotericin B is also included in the exempted category of exports.
The central government will give loans of 1.58 lakh crore rupees to the states as GST compensation to the states.
There was a discussion on reducing the GST rate on Covid Reladate Medical Equipments. The Group of Ministers (GoM) will consider these and a report will be submitted on 8 June.
After June 2022, the GST Council will convene a special session to discuss Compensation Cess.
Annual return filing will also be optional for the financial year 2020-21, which will be available to small taxpayers with a termover less than Rs 2 crore.
The amnesty scheme has been proposed to provide relief to small taxpayers, so as to relieve the late fees. This will provide relief to about 89% of GST taxpayers.
The GST Council felt that this is not the right time to make any changes in the inversion duty, so it is being left unattended.
What were the demands of the state governments?
- The GST on medical grade oxygen, oxygen concentrator, pulse oximeter, and covid testing kit should be reduced from 12% to 5%.
- Punjab, Rajasthan, and West Bengal have strongly objected to the imposition of GST between 5 and 12% on medical equipment related to Covid. Their demand was that GST should be abolished completely on them.
- The amount of GST Compensation Loan for FY 2020-21 should be adjusted towards GST Compensation Grant.
- The period for granting GST compensation should be increased to 5 years by the year 2027.
- The borrowing limit for states should be 4% of GDP to 5%.
- 1% additional borrowing limit to be increased to 2%.
- The tax should be completely removed from the vaccine. But, the central government is adamant about keeping 5% GST on it.