The recent 45th Goods and Services Tax (GST) Council meeting brought some key decisions which will have a significant effect on various sectors. The major points include extension of concessional GST rates, online food delivery services to collect GST, petroleum and diesel to stay out of GST regime, reduction in GST on fortified rice, and formation of a Group of Ministers (GoM) for rectifying the inverted duty structure.
Extension of Concessional GST Rates
To help combat the Covid-19 pandemic, the Council decided to extend the GST relief on several drugs related to its treatment until December 2021. This extension will provide a significant advantage to those availing these treatments.
GST Collection by Online Food Delivery Apps
In contrast to the previous arrangement, online food delivery aggregators like Swiggy and Zomato are now responsible for paying GST instead of their restaurant partners. Earlier, the taxed amount was paid back to restaurant partners who were then expected to remit it to the government.
Petrol and Diesel Remain Exempt from GST
The council has made a firm decision to keep petrol and diesel out of the GST regime. Although bringing these fuels under the GST realm would have made prices uniform across all states, concerns about revenue buoyancy led to strong opposition from states.
Reduction of GST on Fortified Rice
In an effort to support initiatives like integrated child development schemes, the council recommended reducing the GST rate on fortified rice kernels from 18% to just 5%.
Formation of Groups of Ministers
In response to the issue of the inverted duty structure leading to a stream of revenue outflow, the council plans to establish a Group of Ministers (GoM). This group is tasked with looking into rate rationalisation related issues to correct the existing system and augment revenues. In addition, other GoMs will be created to handle issues of e-way bills, FASTAGs, compliances, technology, plugging of loopholes, composition schemes and more.
About the GST Council
The GST Council, brought to life by Article 279A, is a constitutional body responsible for offering recommendations to the Union and State Government on issues concerning Goods and Services Tax. The Union Finance Minister chairs the council, which also includes the Union State Minister of Revenue or Finance and Ministers in charge of Finance or Taxation from all the states, providing appropriate representation for both centre and state.
Last Modified: February 13, 2024