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Recommendations relating to GST rates on goods and services

recommendation related to GST laws and procedures
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In the 45th GST Council Meeting headed by Union Finance Minister Smt. Nirmala Sitharaman, various rate changes have been discussed and recommended by the GST Council which are as follows:-

COVID-19 relief measure in form of GST rate concessions

Extension of existing concessional GST rates (currently valid till 30thSeptember, 2021) on following Covid-19 treatment drugs, up to 31st December, 2021, namely-

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

Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31stDecember, 2021, namely-

  1. Itolizumab
  2. Posaconazole
  3. Infliximab
  4. Favipiravir
  5. Casirivimab & Imdevimab
  6. 2-Deoxy-D-Glucose
  7. Bamlanivimab & Etesevimab

Major recommendations on GST rate changes in relation to Goods [w.e.f 1.10.2021 unless  otherwise stated]

S. No. Description From To
GST rate changes
1. Retro fitment kits for vehicles used by the disabled Appl. rate 5%
2. Fortified Rice Kernels for schemes like ICDS etc. 18% 5%
3. Medicine Keytruda for treatment of cancer 12% 5%
4. Biodiesel supplied to OMCs for blending with Diesel 12% 5%
5. Ores and concentrates of metals such as iron, copper, aluminum, zinc and few others 5% 18%
6. Specified Renewable Energy Devices and parts 5% 12%
7. Cartons, boxes, bags, packing containers of paper etc. 12%/18% 18%
8. Waste and scrap of polyurethanes and other plastics 5% 18%
9. All kinds of pens 12%/18% 18%
10. Railway parts, locomotives & other goods in Chapter 86 12% 18%
11. Miscellaneous goods of paper like cards, catalogue, printed material (Chapter 49 of tariff) 12% 18%
12. IGST on import of medicines for personal use, namely

i.             Zolgensma for Spinal Muscular Atrophy

ii.            Viltepso for Duchenne Muscular Dystrophy

iii.             Other medicines used in treatment of muscular atrophy recommended by Ministry of Health and Family Welfare and Department of Pharmaceuticals.

12% Nil
13. IGST exemption on goods supplied at Indo-Bangladesh Border haats Appl. rate Nil
14. Unintended waste generated during the production of fish meal except for Fish Oil Nil (for the   period       1.7.2017

30.9.2019)

Other changes relating to GST rates on goods

  1. Supply of mentha oil from unregistered person has been brought under reverse Further, Council has also recommended that exports of Mentha oil should be allowed only against LUT and consequential refund of input tax credit.
  2. Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks.

Correction in Inverted Duty structure in Footwear and Textiles sector

GST rate changes 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, will be implemented with effect from 01.01.2022.

In the terms of the recent directions of the Hon’ble High Court of Kerala, the issue of whether specified petroleum products should be brought within the ambit of GST was placed for consideration before the Council. After due deliberation, the Council was of the view that it is not appropriate to do so at this stage.

Major GST changes in relation to rates and scope of exemption on Services [w.e.f 10.2021 unless otherwise stated]

No. Description From To
1. Validity of GST exemption on transport of goods by vessel and air from India to outside India is extended upto 30.9.2022. Nil
2. Services by way of grant of National Permit to goods carriages on payment of fee 18% Nil
3. Skill Training for which Government bears 75% or more of the expenditure [ presently exemption applies only if Govt funds 100%]. 18% Nil
4. Services related to AFC Women’s Asia Cup 2022. 18% Nil
5. Licensing services/ the right to broadcast and show original films, sound recordings, Radio and Television programmes [ to bring parity between distribution and licencing services] 12% 18%
6. Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with Colour printing of images from film or digital media) 12% 18%
7. Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn.
8. E Commerce Operators are being made liable to pay tax on following services provided through them

(i)       transport of passengers, by any type of motor vehicles through it [w.e.f. 1st January, 2022]

(ii)     restaurant services provided through it with some exceptions [w.e.f. 1st  January, 2022]

9. Certain relaxations have been made in conditions relating to IGST exemption relating to import of goods on lease, where GST is paid on the lease amount, so as to allow this

Clarification in relation to GST rate on Goods

  1. Pure henna powder and paste, having no additives, attract 5% GST rate under Chapter
  2. Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other suchresidues, falling under HS code 2303 attract GST at the rate of 5%.
  3. All laboratory reagents and other goods falling under heading 3822 attract GST at the rate of 12%.
  4. Scented sweet supari and flavored and coated illachi falling under heading 2106 attract GST at the rate of 18%
  5. Carbonated Fruit Beverages of Fruit Drink” and “Carbonated Beverages with Fruit Juice” attract GST rate of 28% and Cess of 12%. This is being prescribed specifically in the GST rate
  6. Tamarind seeds fall under heading 1209, and hitherto attracted nil rate irrespective of However, henceforth they would attract 5% GST rate (w.e.f. 1.10.2021) for use other than sowing. Seeds for sowing will continue at nil rate.
  7. External batteries sold along with UPS Systems/ Inverter attract GST rate applicable to batteries [ 28% for batteries other than lithium-ion battery] while UPS/inverter would attract 18%.
  8. GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, during the period from 7.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 1st January 2019.
  9. Due to ambiguity in the applicable rate of GST on Fibre Drums, the supplies made at 12% GST in the past have been Henceforth, a uniform GST rate of 18% would apply to all paper and paper board containers, whether corrugated or non-corrugated.
  10. Distinction between fresh and dried fruits and nuts is being clarified for application of GSTrate of “nil” and 5%/12% respectively;
  11. It is being clarified that all pharmaceutical goods falling under heading 3006 attract GST at the rate of 12% [ not 18%].
  12. Essentiality certificate issued by Directorate General of Hydrocarbons on imports would suffice; no need for taking a certificate every time on inter-state stock

Clarification in relation to GST rate on services

  1. Coaching services to students provided by coaching institutions and NGOs under thecentral sector scheme of ‘Scholarships for students with Disabilities” is exempt fromGST
  2. Services by cloud kitchens/central kitchens are covered under ‘restaurant service’, andattract 5% GST [ without ITC].
  3. Ice cream parlor sells already manufactured ice- Such supply of ice cream by parlors would attract GST at the rate of 18%.
  4. Overloading charges at toll plaza are exempt from GST being akin to
  5. The renting of vehicle by State Transport Undertakings and Local Authorities iscovered by expression ‘giving on hire’ for the purposes of GST exemption
  6. The services by way of grant of mineral exploration and mining rights attracted GST rate of 18% e.f. 01.07.2017.
  7. Admission to amusement parks having rides etc. attracts GST rate of 18%. The GST rate of 28% applies only to admission to such facilities that have casinos
  8. Alcoholic liquor for human consumption is not food and food products for the purpose of the entry prescribing 5% GST rate on job work services in relation to food and food products.

To download the Press release, click here Press Release 45th GST Council Meeting

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