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GST Council rejigs some rates, extends cess levy, petroleum still out
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SME Times News Bureau | 17 Sep, 2021
The GST Council on Friday decided to provide relief on Covid-related
items by extending the concessional rate of duty on medicines for it
upto December 31, 2021, while taking no decision on bringing petroleum
products under its ambit, saying it was not the right time yet.
It
also decided to correct inverted duty structure in footwear and textile
sectors while deciding to treat food delivery apps such as Zomato and
Swiggy as restaurants, thereby, becoming responsible to pay 5 per cent
GST on supplies made by them. However, the new system will not make
meals dearer since no new tax component has been added.
The
Council, which met in Lucknow in physical form for the first time since
the outbreak of Covid pandemic, did discuss inclusion of petroleum
products under GST on the directions of the Kerala High Court but
decided that it was not the right time to undertake this change, Finance
Minister Nirmala Sitharaman said after the meeting.
Briefing the media after the meeting, she said: "We have taken a few people friendly decisions...."
Sitharaman
also said that the Council has granted tax exemption on drugs to treat
muscular atrophy imported for personal use only, and reduced the duty on
drugs for cancer treatment from 12 per cent to 5 per cent.
Besides,
the Council exempted the IGST on imports of leased aircrafts and on
exports of goods by vessel or air till September 30, 2022.
However, it increased GST on railway parts, locomotives and other goods to 18 from 12 per cent.
It
also discussed the compensation formula agreed for states to meet their
revenue shortfall on account of the GST and decided that the Centre
would continue to levy compensation cess beyond the stipulated five
years period ending July 2022 to upto March 2026 to pay back the loans
taken to meet the shortfall in FY21 and FY22.
With regard to
Covid relief medicines, the concessional GST rate, valid till September
30, had been extended to December 31 for Amphotericin B (used for
treating black fungus), Remdesivir, Tocilizumab, and anti-coagulants
like Heparin.
Besides, reduced GST rate of 5 per cent will also
be available till December 31 in the case of Covid-19 treatment drugs,
namely : Itolizumab, Posaconazol, Infliximab, Favipiravir, Casirivimab
& Imdevimab, 2-Deoxy-D-Glucose, Bamlanivimab, and Etesevimab.
The
Council also decided to reduce rate on supply of biofuel to oil
companies from 12 to 5 per cent while raising duty on a host of ores and
concentrates of metals such as iron, copper, aluminum, zinc and few
others from 5 to 18 per cent to correct the duty anomaly.
Moreover,
brick kilns would be brought under special composition scheme with
threshold limit of Rs 20 lakhs with effect from April 1, 2022. Bricks
would attract GST at the rate of 6 per cent without ITC under the
scheme, and a 12 per cent with ITC would otherwise apply to bricks.
In
order to correct inverted duty structure, in footwear and textiles
sector, as was discussed in earlier GST Council Meeting and was deferred
for an appropriate time, the Council decided it will be implemented
with effect from January 1, 2022.
On the issue of compensation
scenario, a presentation was made to the Council wherein it was brought
out that the revenue collections from Compensation Cess in the period
beyond June 2022 till April 2026 would be exhausted in repayment of
borrowings and debt servicing made to bridge the gap in 2020-21 and
2021-22. In this context, various options, as have been recommended by
various committees/forums were presented, and the Council deliberated at
length on the issue.
Sitharaman said the Council decided to set
up a GoM to examine the issue of correction of inverted duty structure
for major sectors, and rationalise the rates, and review exemptions from
the point of view of revenue augmentation, from GST.
It was
also decided to set up a GoM to discuss ways and means of using
technology to further improve compliance including monitoring through
improved e-way bill systems, e-invoices, FASTag data and strengthening
the institutional mechanism for sharing of intelligence and coordinated
enforcement actions by the Centre and the States.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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