GST Reduced on Life-Saving Drugs, Petrol Left Out: What Did FM Sitharaman Say?

The GST Council decided not to include petrol and diesel under the tax structure.

The GST Council on Friday, 17 September, decided to provide relief on COVID-related items by extending the concessional rate of duty on medicines for it up to 31 December 2021, while taking no decision on bringing petroleum products under its ambit, saying it was not the right time yet.

It also decided to correct inverted duty structure in footwear and textile sectors, while deciding to treat food delivery apps such as Zomato and Swiggy as restaurants, thereby, becoming responsible to pay 5 percent GST on supplies made by them. However, the new system will not make meals dearer since no new tax component has been added.

Following the meeting of the GST Council in Lucknow on Friday, Finance Minister Nirmala Sitharaman announced:

"The concessional GST rates on coronavirus-related medicines have been extended till 31 December 2021."

Finance Minister Nirmala Sitharaman

These concessional rates were previously valid till 30 September.

Sitharaman also announced that some life-saving drugs, "which are not connected with Corona and are very expensive. Exemptions have been given for such drugs", news agency ANI reported.

She named two such drugs - Zolgensma and Viltepso. "These two are very important drugs which cost something like Rs 16 crore. So the council has decided to grant exemption from GST," she said.

She added that drugs that are suggested by the Ministry of Health for treating muscular atrophy, on the recommendation of Health Ministry and Dept of Pharmaceuticals, have also been exempted for IGST on import for personal use.

The GST Council met on Friday to take decisions on issues related to duty revision that were put on the back burner in earlier meetings to focus on COVID-19 relief measures.

Concessional Gst Rates on COVID-Related Medicines

Announcing that concessional GST rates on COVID-related medicines have been extended till 31 December, Sitharaman informed of the GST rates that will be applied on the following medicines:

• Amphotericin B - nil rate

• Tocilizumab - nil rate

• Remdesivir - 5 percent

• Anticoagulants like Heparin - 5 percent

GST rate on seven other medicines, which are recommended by Department of Pharmaceuticals, have also been recommended for reduction from 12 percent to 5 percent. That is also extended till 31 December, Sitharaman said.

Similarly, she added, "cancer-related drugs - Keytruda - along with similar other medicines used in the treatment of cancer as per Health Ministry or Department of Pharmaceuticals are being recommended that they should come down from 12 percent to 5 percent."

Other GST Rates:

• GST rates on Retro Fitment Kits for vehicles, used by persons with special disabilities, have been reduced to 5 percent.

• GST rate on fortified rice kernels for schemes like integrated child development schemes have been recommended to be reduced from 18 percent to 5 percent.

• GST rate on biodiesel which is supplied to oil marketing companies for blending with diesel have also been reduced from 12 percent to 5 percent.

Nirmala Sitharaman also announced that transport of export goods by vessels and air will be exempted from GST till 30 September.

She was quoted as saying, "This exemption was given because of difficulties being faced by exporters in getting a refund of ITC (Input Tax Credit) due to technical issues on GST portal. This exemption is being extended by one more year", ANI reported.

Petrol and Diesel Not Brought Under GST Tax Structure: FM

The GST Council discussed the topic of inclusion of petrol and diesel under the tax structure, however decided not to include it, as the Council felt "it was not the time to bring petroleum products under the GST," NDTV reported.

The inclusion was put on the table after the Kerala High Court had asked the GST Council to decide on bringing petrol and diesel within the GST ambit.

Finance Minister Nirmala Sitharaman said, "This (decision) will be reported to the high court."

Zomato and Swiggy To Collect 5 Percent GST

Sitharaman also announced that food delivery apps like Zomato and Swiggy will collect five percent GST from consumers instead of the restaurant they pick up orders from.

Revenue Secretary Tarun Bajaj explained, "Suppose you order food from the aggregator... now the restaurant is paying taxes. But we found some restaurants were not paying. We are now saying that if you order the aggregator will collect from the consumer and pay to the authorities instead of the restaurant doing this."

(With inputs from ANI and NDTV.)