A group of ministers will be formed to review the GST rates on Covid-19 vaccines, ventilators, medical-grade oxygen and certain diagnostic test kits.
The GoM, which will be formed tomorrow, will have to submit its report by June 8. The group will decide on any new rates, exemptions or further reduction on specific items.
The GST Council said it will make appropriate changes to clarify that land owner promoters can utilise credit of GST charged to them by developers with respect of apartments that are subsequently sold by the land promoter and on which GST is paid.
The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate, it said.
The council also clarified that any milling services of wheat, rice or paddy provided to governments for distribution of flour or rice under the Public Distribution Scheme would be exempt from GST if the value of goods in composite supply does not exceed 25%.
Otherwise, such services would attract GST at the rate of 5% if supplied to any person registered in GST, including a person registered for payment of TDS, it said.
THe Goods and Services Tax council has recommended that rates on the maintenance, repair and operations of ships and vessels be reduced to 5% from the existing 18%.
The point of sale for the B2B supply of these MRO services for ships and vessels would be considered as the location of recipient of service, it said.
The Finance Minister said that the biggest decision taken today was about reducing compliance burden on the taxpayers.
To provide relief to small taxpayers, an amnesty scheme has been recommended for reducing late fee, she said. This is likely to benefit around 89% of those who pay GST. Taxpayers can file pending returns and avail benefits of scheme with reduced late fee.
Even late fee has been rationalised, she said. "The maximum amount of late fee has been reduced and will come into effect from future tax periods."
The Finance Minister said that the any import of Covid-related relief items, even if purchased or meant for donating to government or any other relief agency, will be exempted from the Integrated Goods and Services Tax till Aug. 31, 2021.
AmphotericinB, the drug required for treating Mucormycosis fungal infection, has also been included in list of items exempted from IGST.
A group of ministers will be formed to examine need for further reductions on items like vaccines and ventilators and decide on any new rates in exemptions. The group will have to submit its report by June 8.
Punjab Finance Minister Manpreet Badal has said that the Union Finance Minister Nirmala Sitharaman has assured states of a discussion on the compensation period of GST.
Cess shortfall issue was discussed. Many states argued that shortfall should be transferred in the form of a grant and that complete shortfall should be compensated.
FM has promised another meeting this quarter to discuss issue of compensation period extension.
The meeting will discuss how to augment resources too.
