GST Council still undecided on tax cuts for Covid goods
■ GoM to take call soon ■Import duty exemptions on Covid items ■Small taxpayers to get ‘late fees’ relief
The Centre on Friday ruled out any immediate reduction of taxes on Covid essentials, as sought in many quarters, and no decision on this was taken at the GST Council’s meeting, which remained inconclusive. The government, however, said a Group of Ministers (GoM) had been formed to submit a report on the reduction of rates on Covid-related items soon. The GST Council’s 43rd meet, that took place after a gap of seven months, took several key decisions, including exemption of duty on the import of Covid-19 related items and an amnesty scheme for small and medium taxpayers to reduce the late fee burden on them.
Briefing the media after the GST Council meeting late on Friday evening, finance minister Nirmala Sitharaman said issues of Covid-related items was one item on the agenda that saw detailed discussions. “The decision over tax rates on Covid vaccines was referred to a Group of Ministers, which will be announced by June 8,” she said.
“The council has also decided to exempt the import of relief items even if they are purchased, if these are meant for donating to the government, or on the recommendation of any state government to any relief agency. This exemption is extended till August 31, 2021,” she said, adding
that a GoM was being formed to submit report on reduction of rates on Covid-related items.
The finance minister further said Amphotericin-B (commonly known as Black Fungus) has also been included in the exemption list for import tax relief. On the exemption on the import of Covid-related items, economic affairs secretary Tarun Bajaj clarified that the ad hoc exemption already available on Covid-related items acquired free had been extended till August 31. “The exemption will depend on the items you’re importing,” he said, adding the question was whether the benefit of GST reduction on Covid vaccines will go to the people. The same question was raised regarding ventilators, and the ministers wanted to look at the questions thoroughly.
For small and medium taxpayers, she said that to provide relief to small taxpayers, an amnesty scheme had been recommended for reducing the late fee payable by small taxpayers and medium taxpayers. “Taxpayers can now file their pending returns and avail the benefits of this amnesty scheme with reduced late fees,” she said.
“This scheme is likely to benefit around 89 per cent of those who pay GST,” the minister said, adding that the issue about extending the GST compensation period, which was widely expected to dominate the discussions, will be taken up at another meeting.
Ms Sitharaman also reiterated that the Centre will also adopt the same GST compensation formula as last year. “As per a rough estimate, the government will need to borrow `1.58 lakh crores and pass it on to the states,” the finance minister added.