Finance Minister Nirmala Sitharaman chaired the 43rd Goods and Services Tax (GST) meeting virtually on May 28, 2021.
Some of the key decisions taken during the 43rd GST Council Meeting included the exemption of import duty on COVID-19 relief items, the inclusion of the drug use to control Black Fungus in the exemptions list, recommendation to amend the CGST Act to simplify the filing of annual return, among others.
The 43rd GST Council meeting began at 11 am and went for almost 9 hours. It was attended by the Minister of State for Finance Anurag Thakur as well as the finance ministers and other senior officials of all the States and UTs also participated in the meeting.
GST Council exempts import duty on COVID relief items:
• The Finance Minister Nirmala Sitharaman, while addressing the media after the 43rd GST Council Meeting, announced that the GST Council has decided to exempt the import duty on COVID-19 related items till August 31, 2021. Issues of COVID-related equipment were one of the items on the agenda on which the council had a detailed discussion.
Issues of COVID-related equipment was one of the items on the agenda that had a very detailed discussion. Many issues were raised & discussed....The Council has decided to exempt the import of relief items till 31st August 2021: FM Nirmala Sitharaman after 43rd GST Council meet pic.twitter.com/tFh9mniL7W
— ANI (@ANI) May 28, 2021
• The Finance Minister added that the Adhoc exemptions have been given for the COVID relief equipment. The GST Council has decided to exempt the import of many of these items with an exemption extended to August 31, 2021.
Adhoc exemptions have been given for COVID-related equipment. The council has decided to exempt the import of many of these items with exemption extended to August 31, 2021: FM Nirmala Sitharaman after 43rd GST Council meet pic.twitter.com/B7Kc59JCoZ
— ANI (@ANI) May 28, 2021
Group of Ministers to be formed to determine further reductions on COVID relief items
• The Finance Minister during the 43rd GST Council Meeting decided and announced to quickly form a Group of Ministers who will submit their report within the 10 days- on or before 8th June, so that if there are any further reductions that are needed to be done on COVID essentials such as vaccines, will be done, in the sense, that the rates will be decided by them.
I've decided & announced in Council that a Group of Ministers quickly formed who will submit their report within 10 days - on or before 8th June, so that if there are any further reductions which need to be done will be done, in the sense, that rates will be decided by them: FM
— ANI (@ANI) May 28, 2021
• In the view of rising cases of Black Fungus in the country, the Council has also included Amphotericin B in the exemptions list which includes other covid relief items.
Due to rising cases of black fungus, Amphotericin B has also been included in the exemptions list: FM Nirmala Sitharaman after 43rd GST Council meet pic.twitter.com/5MnmXgAMww
— ANI (@ANI) May 28, 2021
Reduction of compliance burden on small & medium size taxpayers
• The Union Finance Minister informed that one of the biggest decisions is the reduction of the compliance burden on small and the medium size taxpayers. Late fee and Amnesty-related matters have also been decided upon. In order to provide relief to small taxpayers, an amnesty scheme has been recommended for reducing the late fee payable in these cases.
One of the biggest decisions today is reduction of compliance burden of small taxpayers&medium-sized taxpayers. Late fee, Amnesty-related matters also decided upon. To provide relief to small taxpayers,an Amnesty scheme recommended for reducing late fee payable in these cases: FM pic.twitter.com/G0MC0wCnz0
— ANI (@ANI) May 28, 2021
• Taxpayers can now file their pending returns and get the benefits of this amnesty scheme with reduced late fees.
The late fee has also been rationalized. The rationalized late fee and the decision of reducing the maximum amount of late fee for the small taxpayers will come into effect for future tax periods. It will provide long-term relief to small taxpayers.
Late fees have also been rationalised. The rationalised late fee and the decision to reduce the maximum amount of late fee for small taxpayers will come into effect for future tax periods. This will provide a long term relief to small taxpayers: FM Nirmala Sitharaman
— ANI (@ANI) May 28, 2021
FM assures an increase in vaccine supply
The Finance Minister informed that Rs. 4,500 crores have been paid to two vaccine manufacturers, as an advance payment. The government has nee engaging with the manufacturers/ suppliers including European Union, Japanese for vaccines. In the coming months, the supply of vaccines will be more than what it is.
Rs 4,500 crores were paid to two vaccine manufactures, as advance payment... The country is engaging with suppliers/manufacturers including Japanese, European Union for vaccines. In the coming months, supply will be more than what it is: FM Nirmala Sitharamam pic.twitter.com/MIZkbSFtoO
— ANI (@ANI) May 28, 2021
Annual Return filing simplified
• The annual return filing has also been simplified. The GST Council has recommended amending the CGST Act to allow the self-certification of reconciliation statements, instead of getting it certified by the Chartered Accountants.
Annual return filing has also been simplified. The Council has recommended amending the CGST Act to allow for self-certification of reconciliation statements, instead of getting it certified by Chartered Accountants: FM Nirmala Sitharaman after 43rd GST Council meet pic.twitter.com/nRtihZ2MA6
— ANI (@ANI) May 28, 2021
• The Annual Return Filing will also continue to be optional for FY 2020-21 for the small taxpayers with a turnover of less than Rs. 2 crores, while the reconciliation statements for 2020-21 will be furnished by only those taxpayers whose turnover is Rs. 5 crores or more.
Formula for GST Compensation Cess to remain same
• On the GST Compensation Cess, the same formula as last year will be adopted in 2021 too. A rough estimate is that the Central Government will have to borrow Rs. 1.58 lakh crores and pass it on to the states.
On GST compensation cess, same formula as last year to be adopted this year too. Rough estimate is that Centre will have to borrow Rs 1.58 Lakh Crores and pass it on to States: FM Nirmala Sitharaman after 43rd GST Council meet pic.twitter.com/5NjhV2wnMv
— ANI (@ANI) May 28, 2021
• The Union Finance Minister stated that as the government is in the last of the 5 years of 14% compensation protected revenue arrangement, she has assured the members that a special session of GST Council will be held, exclusively on the single point agenda of how the compensation cess be collected, how much, how long, beyond July 2022.
As we are in the last of the 5 yrs of 14% compensation protected revenue arrangement, I've assured the members, we'll hold special session of GST Council, exclusively on single-point agenda of how compensation cess be collected, how long, how much, beyond July 2022: FM Sitharaman pic.twitter.com/IJQBdI33Hk
— ANI (@ANI) May 28, 2021
42nd GST Council Meeting: Key decisions
• The 42nd GST Council meeting which was held on October 5, 2020, had decided to extend the levy of compensation cess beyond the transition period of 5 years, for such a period as may be required to meet the revenue gap.
• At the request of the states, the government had also decided to increase the shortfall amount to Rs. 1.10 lakh crores from Rs. 97,000 crores under the borrowing option.
• The Finance Minister had stated that 21 states have chosen borrowing option 1 for compensation of revenue shortfall because of GST compensation. She had clarified that the government is not denying the compensation to any state but those who have not chosen any borrowing option have to borrow from the market.
Goods and Services Tax (GST) Council:
GST Council is an apex body that is responsible to take decisions regarding the issues of threshold limit for the applicability of the tax as well as the limit for the dual control between the Central and the State Government.
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