43RD GST COUNCIL MEETING
WHY IN NEWS
Recently, the 43rd Goods and Services Tax (GST) Council meeting was held.
This was the first meeting of the GST Council in the financial year 2021-22. The council’s last meeting was held in October 2020.
AD HOC EXEMPTIONS FOR COVID-RELATED EQUIPMENT:
The GST Council decided to exempt the import of many such items.
The exemption has been extended to August 2021.
Exemptions will be granted to the import of relief items even if they have been purchased as long as they are meant for donations to state governments.
Earlier, Integrated Goods & Services Tax (IGST) exemption was granted only free of cost imports.
With the rising cases of Black Fungus, a particular medicine required for it — amphotericin-B — has also been included in the exemption list (for tax-free imports).
It also proposed to set-up a Group of Ministers (GoM) committee to look into further exemptions that can be provided on account of the Covid-19 relief measure.
GST AMNESTY SCHEME:
It has been recommended for reducing late fees. Taxpayers can file pending returns, avail benefits of the scheme, with reduced late fees.
It will provide relief to small taxpayers who constitute 89% of GST payers.
Late fees have also been rationalised. The maximum amount of late fee has been reduced and it will come into effect from future tax periods.
This will provide long-term relief for small GST taxpayers.
GST COMPENSATION CESS (STATES’ DUES):
Same formula as in 2020 will be adopted this year too. The rough estimate is that the Centre will have to borrow Rs 1.58 lakh crore, which will be passed on to states as back-to-back loans.
A special session of the GST Council will be held to discuss extending paying compensation to states beyond 2022.
ADVANCE PAYMENT TO VACCINE MANUFACTURERS:
Rs. 4,500 crore rupees were paid to two vaccine manufacturers as advance payment.
The country is engaging with suppliers and manufacturers including from Japan, and Europe for vaccines.
ANNUAL RETURN FILING:
Annual return filing has been simplified. The Council has recommended amending the Central Goods & Services Tax (CGST) Act 2017 to allow for self-certification of reconciliation statements, instead of getting it certified by Chartered Accountants.
The Annual Return filing will continue to be optional for 2020-21 for small taxpayers, having a turnover of less than two crore rupees while reconciliation statements for 2020-21 will be furnished only by those taxpayers whose turnover is five crore rupees or more.
GST COMPENSATION CESS
GST Compensation Cess is levied by the GST Act 2017. The object of levying this cess is to compensate the states for the loss of revenue arising due to the implementation of GST on 1st July 2017 for a period of five years or such period as recommended by the GST Council.
Compensation cess is levied over and above the amount of GST charged in relation to a particular supply. The calculation is similar to that of GST – the prescribed rate is applied to the transaction value given under section 15 of the CGST Act 2017 to arrive at the cess liability.
It is a constitutional body (Article 279A) for making recommendations to the Union and State Government on issues related to Goods and Services Tax.
The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.
It is considered as a federal body where both the centre and the states get due representation.