Finance Minister Nirmala Sitharaman is chairing the 45th meeting of the Goods and Service Tax (GST) Council today in Lucknow. This meeting is the first in-person meeting of the GST Council. The last in-person meeting was held in December 2019. Post that, all the GST Council meetings have been virtual. The Council will likely discuss rationalizing an inverted duty structure along with bringing Petrol and Diesel within the ambit of Indirect Taxation. It is also expected that taxes on essential Covid-19 Medicines shall be reduced.
On June 21, The Kerala High Court suggested to the GST Council that it should consider bringing fuel under GST since the prices of Petrol and Diesel skyrocketed this year to some other extent.
Although on the other hand, Kerala Finance Minister KN Balagopal and Maharashtra Deputy Chief Minister Ajit Pawar have completely disapproved of this idea.
The meeting Council shall also deliberate regarding extending the GST rate reduction from 12 per cent to five per cent on four important medicines – Tocilizumab, Amphotericin B, Remdesivir and anti-coagulants such as Heparin – till December 31 from, which are required for the treatment of Covid-19. The rate reduction on these medicines is up to September 30 currently.
The Council shall make important decisions on Compensation to the States beyond 2022. It is expected that various options shall be provided for a compensation formula to the states as when the GST was introduced, States agreed to join this new tax regime on the basis that they should be compensated for any revenue loss in the first five years of such implementation, i.e., July 1, 2017, to June 2022. But in the GST Council Meeting of October 2020, it was decided that the compensation shall extend beyond June 2022. Hence, Its modalities and details will be discussed at the meeting today.
Lastly, The Council has decided to deliberate on treating food delivery services (including takeaway, door delivery services) as “restaurant service” which may draw 5% GST. Resultantly, Major food delivery apps such as Zomato and Swiggy shall be included in the five per cent GST slab as well.