Move to exempt several Covid related items from IGST till August end brings relief to businesses

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The Goods and Services Tax (GST) Council in its 43rd meeting decided to exempt certain items related to Covid-19 from IGST or Integrated Goods and Services Tax. IGST, one of the components of GST is levied in case of inter-state transfer of goods and services.</p>
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The drug used for treating Mucormycosis fungal infection has been included in the list of items exempted from IGST.</p>
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The exemption has been extended till August end.</p>
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Several items including certain diagnostic markers test kits for the virus, Covid 19 vaccines, medical oxygen, oxygen concentrators and other oxygen storage besides transportation equipment among other things are included in the list.</p>
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The Council also decided to form a Group of Ministers (GoM) to look into the need for extending further relief to Covid 19 related individual items on an immediate basis.</p>
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The GoM will have to submit a report by June 8.</p>
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Meanwhile, Finance Minister Nirmala Sitharaman, who chaired the meeting also said that the government has been constantly engaging with other global vaccine manufacturers to look at ways to increase supply of the jabs. Sitharaman said that vaccine production will increase significantly in the coming months.</p>
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The minister also said that the Centre will borrow Rs 1.58 lakh crore to compensate the states for the loss of revenue on account of GST.</p>
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A special amnesty scheme is also being carved out to provide relief to small and medium taxpayers hit by the second wave of the pandemic</p>
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“To provide relief to small taxpayers, an amnesty scheme has been recommended for reducing late fee," she said, adding that this was the biggest decision taken at the meeting.</p>
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The finance minister said that the new scheme is set to benefit about 89 per cent GST payers.</p>
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“Taxpayers can file pending returns and avail benefits of the scheme with reduced late fee," she said. The council also decided to rationalise late fee payment.</p>
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“The maximum amount of late fee has been reduced and will come into effect from future tax periods," Sitharaman said.</p>
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The decision has brought much needed relief to the businesses.</p>
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“We welcome the decisions announced by the GST Council. We appreciate the government’s efforts in fighting the Covid-19 pandemic and enabling better access to medical products and solutions to the country and are happy that some of the key asks from FICCI have been considered,” Uday Shankar, President, FICCI said.</p>