Blog

Daily Current Affairs 18.09.2021 (GST Council not for inclusion of petroleum products: FinMin)

Daily Current Affairs 18.09.2021 (GST Council not for inclusion of petroleum products: FinMin)

52

1.GST Council not for inclusion of petroleum products: FinMin

Centre turns down States’ plea for compensation beyond June 2022

The Goods and Services Tax (GST) Council has decided to keep petroleum products out of the GST regime, while consumers will have to keep paying the Compensation Cess levied on products like automobiles till March 2026 instead of July 2022 as originally envisaged at the time of rolling out the indirect tax regime.

Union Finance and Corporate Affairs Minister Nirmala Sitharaman, who chaired the first physical meeting of the Council in nearly two years, said a discussion on including petroleum products in the GST regime was held purely at the behest of the Kerala High Court, which had suggested that the Council take it up in response to a writ petition.

“The Council members spoke very clearly that they don’t want petroleum products to be included in GST at this time. We shall report the same to the court that the Council has discussed it as per their desire, and the GST Council felt this wasn’t the time to bring petroleum products into GST,” Ms. Sitharaman said.

The Minister also indicated that the Union government is not inclined to consider some States’ demand to extend the five-year period for which they have been assured a 14% revenue growth for giving up several taxation powers to pave the way for implementing the GST regime.

“Legally, compensation was to be paid for five years till July 2022 with an assured level of revenue for the States,” Ms. Sitharaman noted.

Key decisions by the council

  • Petroleum products will be out of the GST regime.
  • Consumers will continue to pay the Compensation Cess along with GST levied on products like automobiles, tobacco products and aerated water till March 2026.
  • Concessional tax rates on COVID-19 essential medicine like Tocilizumab, Amphotericin B and Remdesivir extended till December 31st. 
  • Muscular atrophy drugs like a Zolgensma and Viltepso that cost around ₹16 crore are exempted from GST.
  • Import of leased aircraft exempted from IGST.
  • 5% GST to be levied on food delivery apps.
  • Tax on fortified rice kernels for ICDS scheme reduced from 18% to 5%. 
  • GST on cancer drugs like Keytruda was cut from 12% to 5%.
  • GST on footwear costing less than Rs.1000 and ready-made garments and fabrics have increased to 12% from 5%. It will come in effect from January 1st
  • Bricks would attract GST at the rate of 6% without input tax credits under the scheme, or 12% with input credits.

Formation of two group of ministers

  • The Council has decided to form two groups of ministers (GoMs) To shore up GST revenues.
  • They have to recommend measures within two months. 
  • The first one has been tasked with reviewing tax rate rationalisation issues to correct anomalies in the rate structure.
  • The other will look to tap technology to improve compliance and monitoring. This will look at e-way bills, Fastags, compliance and composition schemes to plug loopholes.
Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest
kurukshetraiasacademy

kurukshetraiasacademy

Leave a Reply

Your email address will not be published.