This was the first time in two years that the GST Council meeting happened in person. It was chaired by Finance Minister Nirmala Sitharaman in Lucknow on Friday. The meeting saw a slew of discourses around taxation. The main decisions, however, remained on anti-COVID drugs, tax on food delivery platforms and the possibility of taxation on petroleum products.
Relief for Sectors
The council decided to extend the GST relief on several drugs related to COVID-19 treatment till December 31. The items on which rate cuts were made include Remdesivir, Tocilizumab, medical-grade oxygen, oxygen generator, ventilators, masks, COVID-19 testing kits, oximeters, hand sanitisers, cremation furnaces, ambulances, temperature checking devices and others. Additionally, the tax rate for cancer treatment has also been reduced to 5% from 12% earlier.
Sectors With Hiked GST Rates
GST was hiked for commodities, railway parts and scrap. GST rate for metal ore and concentrates (iron, copper, aluminium etc) was hiked to 18% from 5%, GST on low-cost footwear and ready-made garments hiked to 12% from 5%, GST on railways parts and locomotives hiked to 18% from 12%, GST for cards, printed material etc was hiked to 18% from 12% and GST on waste, scrap and other plastics was hiked to 18% from 5%.
Furthermore, the council has exempted integrated GST levied on the import of aircraft on a lease basis. This will help the aviation industry avoid double taxation.
Swiggy, Zomato to Pay GST
Online food delivery firms Swiggy and Zomato will now be liable to pay GST. This is not a new tax. Just the tax that was payable by restaurants would now be paid by aggregators. They will be charged 5% GST from January 1, 2022. FM Sitharaman was quoted saying, “Yes there was a detailed discussion... the place where food is delivered is going to be the point where tax will be collected”.
Petrol Not Under GST
Fuel prices have been hovering at record levels which is a cause of concern for consumers. Earlier, Kerala High Court issued a directive mentioning petrol and diesel should be included in GST considering the surging rates. But several states have rejected the inclusion of petrol and diesel under GST. FM Sitharaman also said that it was not the right time to bring petrol under the ambit of GST. However, FM announced a reduction in the GST on biodiesel, which is supplied to oil marketing companies for blending with diesel, to 5% from 12%.
Way Forward...
Fuel prices will continue to remain the same, which means the prices of most goods will be the same. The much-awaited decision on auto fuel was the main highlight of the event. Fuel prices could further rise, given the overall surge in commodity prices. Meanwhile, tax relief for life-saving drugs will be a boon to patients. The tax levied on food delivery apps is to bring the companies under compliance, which means better regulation in the industry. Overall, most goods will continue to see a surge in prices except few drugs and medicines.
