Decisions at 45th GST Council Meeting

The 45th GST Council Meeting was held in Lucknow, Uttar Pradesh, on September 17, 2021, under the chairmanship of the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman. The Finance Ministers of different States & UT, along with Senior Officers from the Union and the State Governments, also participated. And there were certain major decisions taken during the meeting that have been listed below:

1. Covid-19 Relief Measure

The Covid-19 relief measure was given in the form of GST rate concessions by;
i) An extension of concessional rates of GST was given for the following drugs from 30^th September 2021 to 31^st December 2021, namely:

1. Amphotericin B -nil
2. Remdesivir – 5%
3. Tocilizumab -nil
4. Anti-coagulants like Heparin – 5%

ii) GST was reduced to 5% on the following drugs pertaining to the Covid-19 Treatment up to 31^st December 2021, namely:

• Itolizumab
• Posaconazole
• Infliximab
• Favipiravir
• Casirivimab & Imdevimab
• 2-Deoxy-D-Glucose
• Bamlanivimab & Etesevimab

It is to be noted that these concessions are provided only with respect to the drugs included in the COVID-19 treatment, and no other medical equipment included in the same is given within this ambit of reduced GST rate. GST Rate Changes in Relation to Goods and Services, which shall come into effect from 1^st October 2021.

B i) Goods

SL. NO.	ITEMS	APPLICABLE RATE OF GST
1.	Retrofit kits for vehicles like cars and buses used by the disabled	5%
2.	Fortified Rice Kernels are used for schemes like ICDS, etc.	5%
3.	Medicine Keytruda for the treatment of cancer	5%
4.	Biodiesel supplied to OMCs for blending with Diesel 12% 5%	5%
5.	Ores and concentrates of metals such as copper, iron, zinc, aluminium, and a few others	18%
6.	Specified Renewable Energy Devices and parts	12%
7.	Bags, boxes, packing containers of paper, cartons, etc.	18%
8.	Waste and scrap of polyurethanes and other plastics	18%
9.	All kinds of pens	18%
10.	Railway parts, locomotives & other goods provided in the Chapter or Part 86 12% 18%	18%
11.	Varied goods of paper, like cards, catalogues, printed material (Chapter 49 of the tariff)	18%
12.	IGST levied on the importing of medicines for own use, namely, i. Zolgensma for Spinal Muscular Atrophy ii. Viltepso for Duchenne Muscular Dystrophy iii. Extra or other medicines or drugs used in the treatment of muscular atrophy, recommended by the Ministry of Health and Family Welfare and the Department of Pharmaceuticals.	NIL
13.	IGST exception on goods sold at Indo-Bangladesh Border haats	NIL
14.	14. Unintended waste generated during the production of fish meal, except for Fish Oil	Nil (for the Period 1.07.2017 to 30.09.2019)

B ii) Services

SL. NO.	ITEMS	APPLICABLE RATE OF GST
1.	The validity of the GST exception for the transport of goods by vessel and air from India to a location external to India is available until 30.9.2022.	NIL
2.	Facilities by way of a grant of National Permit to goods carriages on payment of a fee	NIL
3.	Skill exercise and teaching for which the Government bears 75% or more of the spending made [Presently, the exception applies only if the Govt funds 100%.]	NIL
4.	Services that are connected to the AFC Women’s Asia Cup 2022.	NIL
5.	Licensing facilities/the right to broadcast and demonstrate original films, sound recordings, Radio and Television programmes [ to bring equality between distribution and licensing services]	18%
6.	Printing and copying services of recorded media, where the content provided by the producer (to bring it on equality with Colour printing images from film or digital media)	18%
7.	The exception for leasing rolling stock by IRFC to Indian Railways has been withdrawn.	–
8.	E-Commerce Operating Platforms are being made liable to pay tax on the following services provided to them (i) transport of customers or passengers by any motor vehicles through it [w.e.f. 1st January, 2022] (ii) restaurant or eatery services provided through it with some exceptions [w.e.f. 1st January, 2022]	–
9.	Regarding the IGST exception relating to the importation of the products on lease, and GST on such import of goods on lease is paid on the lease amount, so as to allow this exemption even if (i) such goods are moved to a new lessee in India upon finishing or termination of the lease; and (ii) The lessor situated in SEZ pays GST below the forward charge.	–

 
With respect to point (8), in ‘B.ii’, it is to be noted that e-commerce operators shall now be held responsible or liable to pay taxes on services like:

• Transport of passengers by any motor vehicle made using their platform from 1st January 2022.
• Restaurant services will be provided through the platforms of e-commerce operators starting January 1, 2022, and this will mainly include food delivery applications such as Swiggy and Zomato. To date, e-commerce operators who collected GST on transactions were supposed to pay the same to the restaurants, which would then remit it to the Government. However, from January 1, 2022, onwards, e-commerce operators such as Swiggy and Zomato will be held liable for paying the GST collected by the government.

Clarifications with regard to the GST Rate on Goods and Services

  C. i) Goods

SL. NO.	GOODS/SERVICES	RATE OF GST
1.	Pure henna powder and paste (that have no additives)                5%	5%
2.	Dried Distillers’ Grains with Soluble [DDGS], Brewers’ Spent Grain (BSG), and other such remains falling under HS code 2303	5%
3.	Laboratory substances or mixtures and other goods falling under heading 3822	12%
4.	Scented or perfumed sweet supari and flavoured and coated Elaichi falling under heading 2106	18%
5.	Carbonated and fizzy fruit drinks and carbonated drinks with fruit juice	28% + Cess 12%
6.	Tamarind seeds fall under the heading 1209	Nil for Seeds used for Sowing 5% for Others
7.	Outside batteries are supplied along with UPS systems/inverters	28% (Other than Lithium-ion batteries)
8.	UPS/inverter	18%
9.	Paper and paperboard containers, whether rigid or non-corrugated	18%
10.	Fresh/dried nuts	5%/12%
11.	Pharmaceutical goods falling under heading 3006	12%

C. ii) Services

SL. NO.	GOODS/SERVICES	RATE OF GST
1.	Coaching facilities that are provided to students by coaching institutions and NGOs under the central sector scheme of ‘Scholarships for students with Disabilities’	Exempt
2.	Facilities by cloud kitchens/central kitchens are now covered under ‘restaurant service’	5%
3.	Ice cream by parlours     18%	18%
4.	Overloading charges at toll plazas	Exempt
5.	Renting of vehicles like buses by state transport undertakings and local departments or authorities is now covered by the expression ‘giving on hire’	Exempt
6.	Grant of mineral exploration and mining rights	18%
7.	Permission to get admission to amusement parks with rides, etc.	18%
8.	Admission to facilities that have casinos	28%
9.	Alcoholic liquor for human consumption is not food and food products for the entry prescribing 5% GST rate on job work services in relation to food and food products.	NA

GoM to look after Rate Rationalization

A GoM or a Group of State Ministers will be established by the Government to address rate rationalization-related issues, thereby correcting the inverted duty structure and taking the necessary steps to augment revenues.

An inverted and upturned duty structure arises basically when the taxes on output or a final product are lower than the taxes on the inputs utilized, which would create an inverse accumulation of ITC, which, in most cases, has to be refunded. This has prompted or implied a central revenue outflow for the Government, which has led the government to analyze and reexamine the duty structure.
Other GoM will be set up for looking after the issues related to;

• E-way bills,
• FASTAGs,
• Compliances,
• Technology,
• Plugging of loopholes,
• Composition schemes and such other matters related thereto.

Petrol and Diesel are not included under the GST Regime:

The council has decided that gasoline and diesel shall not be brought under the GST regime, as the states vehemently opposed such inclusion, raising concerns regarding the revenue earned by the states from such fuel sales.
However, suppose the same is brought under the GST regime. In that case, the prices of these fuels will become uniform, as various other taxes, such as excise and VAT rates by the Centre and the State, will be eliminated, and only GST will be applicable. This will also help bring down the prices of fuels, which are currently at record highs compared to recent years.