Highlights of 45th Gst Council Meeting
The Goods and Service Tax (GST) council convened for its 45th Gst Council Meeting on 17th September 2021, in Lucknow, Uttar Pradesh. Chaired by Finance Minister Nirmala Sitharaman, this meeting marked the first physical gathering after a series of virtual meetings spanning one and a half years. Key topics included reducing taxes on life-saving medicines, evaluating the inclusion of petrol and diesel within indirect tax, addressing the inverted duty structure, and classifying food delivery apps as restaurant services. These were among the highlights of this landmark meeting.
Key Highlights of 45th Gst Council Meeting
The major decisions taken during the 45th Gst Council Meeting are outlined below:
- Extension of concessional GST rates on COVID-related drugs till December 31st, 2021.
- Tax rate on cancer treatment medications reduced from 12% to 5%.
- Biodiesel tax rate for blending with diesel reduced to 5%.
- Correction of the inverted duty structure on footwear and textiles from January 1st, 2022.
- A group of state ministers to examine rate rationalization issues within two months.
- GST to be collected by e-commerce operators on restaurant services offered through their platforms, effective at the point of delivery.
- No definitive decision on including petrol under GST was reached.
COVID-19 Relief Measures and GST Concessions
- The GST council extended concessions on four drugs related to COVID-19 treatments until the end of December and introduced further tax cuts for additional life-saving medicines.
- No GST will be imposed on medications like Amphotericin B and Tocilizumab until December 31st.
Extension of Existing Concessional GST Rates on Key COVID-19 Medicines
GST rate concessions for COVID-19 medications, initially set to expire on September 30th, were extended until December 31st. This extension applies solely to medicines, excluding medical equipment. Details from the 44th GST Council Meeting recommendations are as follows:
| Sl. No. | Medicines | GST Rate Recommended |
| 1. | Tocilizumab | Nil |
| 2. | Amphotericin B | Nil |
| 3. | Anti-Coagulants like Heparin | 5% |
| 4. | Remdesivir | 5% |
| 5. | Other drugs recommended by MoHFW and DoP | 5% |
Reduction of GST Rate to 5% on More COVID-19 Treatment Drugs
The proposal to reduce the GST rate from 12% to 5% on seven additional drugs until December 31, 2021, received approval.
| Sl. No. | Medicines | Present GST Rate | GST Rate Recommended |
| 1. | Itolizumab | 12% | 5% |
| 2. | Posaconazole | 12% | 5% |
| 3. | Infliximab | 12% | 5% |
| 4. | Favipiravir | 12% | 5% |
| 5. | Casirivimab & Imdevimab | 12% | 5% |
| 6 | 2-Deoxy-D-Glucose | 12% | 5% |
| 7 | Bamlanivimab & Etesevimab | 12% | 5% |
Inverted Duty Scheme on Footwear and Textiles
The GST council announced that the inverted duty structure in the footwear and textile sectors will be corrected starting January 2022. This move follows previous discussions highlighted in the 43rd GST Council Meeting.
GST on Petrol and Diesel
The 45th Gst Council Meeting did not finalize the proposal to bring petrol within the GST framework. The council deliberated on whether specified petroleum products, such as these, should be included under GST, ultimately deciding it was not the right time.
Food Delivery Platforms Come under GST
E-commerce operators like Zomato and Swiggy will now be responsible for collecting and paying GST on services provided through their platforms, starting January 1, 2022. This decision does not introduce a new tax; rather, it transfers the responsibility of tax payment from restaurants to the aggregators. The GST application changes were also discussed in the 50th GST Council Meeting.
GST Rate Changes for Goods
The 45th Gst Council Meeting suggested various GST rate changes for goods effective from 1st October 2021. Significant changes include:
- Retro fitment kits for disabled individuals: reduced to 5%.
- Fortified rice kernels for ICDS: decreased from 18% to 5%.
- Biodiesel supplied to oil marketing firms: reduced to 5%.
- Cancer drugs, including Keytruda: reduced from 12% to 5%.
For more details on these recommendations, refer to an analysis of the 47th GST Council Meeting.
GST Rate Changes on Other Goods
| Description | Present GST Rate | GST Rate Recommended |
| Ores and concentrates of metals | 5% | 18% |
| Specified Renewable Energy Devices | 5% | 12% |
| Cartons, boxes, and packing containers | 12%/18% | 18% |
| Waste and scrap of polyurethanes and plastics | 5% | 18% |
| Railway parts and locomotives | 12% | 18% |
For context, you can view the recommendations about previous GST rate changes from the 39th GST Council Meeting.
Clarifications Concerning the GST Rate on Goods
The clarifications provided by the 45th Gst Council Meeting on GST rates for goods include:
| Sl. No. | Item | GST Rate |
| 1. | Pure henna powder and paste (without additives) | 5% |
| 2. | Brewers’ Spent Grain (BSG) | 5% |
| 3. | Laboratory reagents and goods | 12% |
Clarifications Concerning the GST Rate on Services
The following clarifications concerning GST rates on services were announced:
| Sl. No. | Service | GST Rate |
| 1. | Coaching Services for Students with Disabilities | Exempt |
| 2. | Cloud Kitchens/Central Kitchens | 5% |
| 3. | Ice Cream by Parlors | 18% |
To explore previous discussions on GST rates for services, visit the details of the 38th GST Council Meeting.
Recommendations Relating to GST Law and Procedure
- The 45th Gst Council Meeting reaffirmed that interest is to be charged only on the net cash liability under GST, with Section 50(3) of the CGST Act being amended retrospectively back to July 1, 2017.
- It was decided that unutilized balances in CGST and IGST cash ledgers can be transferred between distinct entities, registered under different states but with the same PAN, without the need for a refund process.
Relaxation in the Requirement of Filing FORM GST ITC-04
- Taxpayers with an annual aggregate turnover above Rs. 5 crores need to file FORM GST ITC-04 biannually.
- For those below Rs. 5 crores, this form is to be filed annually.
This initiative aims to facilitate tax compliance and was also discussed in the 27th GST Council Meeting.
Measures for Streamlining Compliance in GST
- Aadhaar authentication becomes mandatory for refund claims and registration cancellations.
- A late fee for delayed FORM GSTR-1 filing will be auto-collected in FORM GSTR-3B.
- Refunds will only be processed into bank accounts linked to the PAN used for GST registration.
- Form GSTR-1 cannot be furnished if the previous month's GSTR-3B has not been filed.
- ITC is restricted to the extent that invoices and debit notes are reported by suppliers in FORM GSTR-1 and communicated to the taxpayer in FORM GSTR-2B.
These compliance measures, detailed further by the latest GST updates, ensure a more efficient tax collection system.