Industry welcomes GST Council's decisions; says zero rating of COVID-relief items should be explored

Industry welcomes GST Council's decisions; says zero rating of COVID-relief items should be explored

FPJ Web DeskUpdated: Saturday, May 29, 2021, 02:06 PM IST
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FICCI said that the Council's decision providing relief on import of COVID-related items and Black Fungus drug were a welcome move. | ANI

India Inc. has largely welcomed the decisions taken by the GST Council on Friday to exempt COVID relief items from duty and easing compliance burden for taxpayers but said the measures stopped short of giving complete exemption to taxpayers from late fee payment and also missed out on providing zero rating of COVID supplies.

Industry body FICCI said that the Council's decision providing relief on import of COVID-related items and Black Fungus drug were a welcome move, and now GoM recommendations would be awaited to see what action is proposed on GST rate for other medical supplies for COVID including that for vaccines and ventilators, IANS said.

"We welcome the decisions announced by the GST Council. We appreciate the government's efforts in fighting the COVID-19 pandemic and enabling better access to medical products and solutions to the country and are happy that some of the key asks from FICCI have been considered," Uday Shankar, President, FICCI, said.

"We eagerly look forward to the report of the Group of Ministers formed for consideration of further reductions in GST rates on COVID-related essentials. A quick decision on this front will help us attain self-sufficiency in this need of hour. At this juncture we cannot afford to lose further time," he added.

The GST Council on Friday extended relief on import of COVID-related relief items, if purchased or meant for donating to government or any other relief agency, by exempting it from the Integrated Goods and Services Tax till Aug. 31, 2021. Also, the drug required for treating Mucormycosis fungal infection, has been included in list of items exempted from IGST.

Furthermore, the Council also recommended amnesty scheme to reduce the late fee and provide some relief to the small taxpayers. However, FICCI recommended a waiver from the late fees and interest to provide maximum benefit to taxpayers hit hard by pandemic disruptions.

The decision regarding extension of due dates of various compliances under GST laws for the month of May and June, 2021 will also provide a big relief to the taxpayers during this difficult time. Also, the announcement regarding optional return filing for 2020-21 for taxpayers with a turnover less than Rs 2 crore will provide a further respite to the smaller companies.

"FICCI was also hoping to see a decision regarding our long pending demand for zero rating of healthcare services for a period of 24 months during this pandemic period for the healthcare sector. We believe this would further empower the healthcare undertakings to prepare and tackle the ongoing second wave and impending third wave," Shankar said.

Also, though it was pointed out that amid the current situation it is not the right time to undertake correction of inversion duties, FICCI feels that the matter warrants a quick decision as it continues to impact our competitiveness.

Niraj Hutheesing, Founder & Managing Director, Cygnet Infotech, said the industry supports the government's announcement on the Amnesty scheme, that aims to ease the compliance burden. ”To ease compliance during this pandemic, the law committee of the Council will look into issues involving Quarterly Returns Monthly Payment (QRMP) scheme for GST returns. Additionally, the GST Council has also taken various decisions from exempting the import of COVID-related relief materials meant for donation to bringing in an amnesty scheme for SMEs to provide relief in late fees. All of these decisions are collectively going to benefit common people and small and medium businesses."

Abhishek Jain, Tax Partner, EY, said as expected, on the issue of compensation to States, the GST Council adopted the last year formula of borrowing and passing it as back to back loan to the states. However, it would be interesting to see the outcome of the special session that the Finance Minister said would be held to deliberate whether the compensation should be given to the States beyond the original period promised of 5 years, he said.

"The 43rd GST council meeting was much-awaited by the Industry players seeking reliefs from the government in these tough times of pandemic. Considering this, the GST Council headed by the finance minister has extended the current exemptions for COVID relief goods up to August 2021, and proposed to set-up a GoM committee to look into further exemptions that can be provided on account of COVID relief measure. The businesses might be slightly disappointed having to further wait up to June 8 to get a final decision on the additional GST exemptions for COVI relief activities, when the GoM will submit its report,” he added.

(With IANS inputs)

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