45th GST Council Meeting Highlights and Recommendations

The 45th meeting of the GST Council was held in Lucknow on September 17th, 2021, and was chaired by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. So here are the highlights and recommendations suggested by the GST Council in 45th GST Council Meeting: 

COVID-19 relief measure in form of GST rate concessions 

Extending the present concessionary GST rates on the following C-19 treatment medicines, from 30th September 2021 to December 31, 2021, namely- 

• Amphotericin B -nil 
• Remdesivir – 5% 
• Tocilizumab -nil 
• Anti-coagulants like Heparin – 5%  

GST rate reduction to 5% for other COVID-19 treatment medicines till December 31, 2021, namely- 

• Itolizumab 
• Posaconazole 
• Infliximab 
• Favipiravir 
• Casirivimab & Imdevimab 
• 2-Deoxy-D-Glucose 
• Bamlanivimab & Etesevimab 

Major Change of GST Rate in relation to Goods Applicable from 1st October 2021 

S. No.	Description	From	To
1.	Kits for handicapped people’s automobiles that have been retrofitted	Appl. rate	5%
2.	For programs like ICDS and others, fortified rice kernels are used.	18%	5%
3.	Medicine Keytruda (cancer treatment drug).	12%	5%
4.	Biodiesel is provided to OMCs to mix with diesel.	12%	5%
5.	Metal ore and concentrates (iron, copper, aluminum, zinc, and a few others)	5%	18%
6.	Specified Renewable Energy Devices and Parts	5%	12%
7.	Paper packaging containers, cartons, boxes, bags, etc.	12%/18%	18%
8.	Polyurethane and other plastics waste and scrap	5%	18%
9.	Various types of pens	12%/18%	18%
10.	In Chapter 86, you’ll find railway parts, locomotives, and other products.	12%	18%
11.	Miscellaneous items of paper such as cards, catalogs, and printed materials (Chapter 49 of tariff)	12%	18%
12.	IGST on the import of medications for personal use, such as Zolgensma for Spinal Muscular Atrophy, Viltepso for Duchenne Muscular Dystrophy, and other medicines approved by the Ministry of Health and Family Welfare and the Department of Pharmaceuticals for the treatment of muscular atrophy.	12%	Nil
13	IGST exemption on goods supplied at Indo-Bangladesh Border haats	–	Nil
14	Unintended waste generated during the production of the fish meal except for Fish Oil	–	Nil (Period between 1.7.2017 to 30.9.2019)

Clarification Regarding the GST rates on Goods 

1. Under Chapter 14, pure henna powder and paste with no additions are subject to a 5% GST charge. 
2. Brewers’ spent grain (BSG), Dried Distillers’ Grains with Soluble [DDGS], and other residues that come under HSN code 2303 are subject to a 5% GST. 
3. GST is charged at a rate of 12% on all laboratory reagents and other items falling under heading 3822. 
4. GST is charged at 18 percent on scented sweet supari and flavored and coated illachi that come under heading 2106. 
5. “Carbonated Fruit Beverages with Fruit Juice” and “Carbonated Fruit Beverages with Fruit Drink” are subject to a 28 percent GST rate and a 12 percent Cess. 
6. Tamarind seeds are classified as heading 1209 and have received no rate in the past, regardless of their use. However, for purposes other than sowing, they will now be subject to a 5% GST rate (WEF 1st October 2021). Seeds for sowing will be available at no cost. 
7. External batteries sold with UPS Systems/ Inverters are subject to the GST rate that applies to batteries (28 percent for batteries other than lithium-ion batteries), whereas UPS/inverters are subject to 18 percent. 
8. During the period from 1.7.2017 to 31.12.2018, GST on selected Renewable Energy Projects can be paid in the 70:30 ratio for goods and services, respectively, in the same manner as it has been mandated for the period on or after 1st January 2019. 
9. The supplies made at a 12% GST rate in the past have been regularised due to uncertainty in the relevant GST rate on Fibre Drums. All paper and paper board containers, whether corrugated or non-corrugated, will henceforth be subject to a standard 18 percent GST charge. 
10. The distinction between fresh and dried fruits and nuts is being clarified for the purposes of applying GST rates of “nil” and “5%/12%” accordingly; it is also being clarified that all pharmaceutical items falling under category 3006 are subject to GST at a rate of 12 percent [ not 18 percent ]. 
11. On imports, an essentiality certificate granted by the Directorate General of Hydrocarbons would suffice; there would be no need to get a certificate each time interstate stock transfers. 

Other Clarification Regarding the GST rates on Goods 

1. The supply of mentha oil by an unregistered supplier who is ered under reverse charge. Furthermore, the Council has proposed that exports of Mentha oil be permitted only in exchange for LUT and a corresponding refund of ITC. 
2. With effect from 1.4.2022, brick kilns would be subject to a specific composition plan with a threshold level of Rs. 20 lakhs. Without the ITC, bricks would be subject to a 6% GST rate under the program. Otherwise, bricks would be subject to a 12 percent GST rate with an ITC. 
3. In the footwear and textiles industry, the inverted duty structure has been corrected: GST rate modifications in the footwear and textiles sectors to rectify inverted duty structures, as agreed at a previous GST Council Meeting and delayed for a suitable period, will take effect on January 1, 2022 
4. The question of whether some petroleum products should be brought under the scope of GST was raised before the Council in response to recent orders from the Hon’ble High Court of Kerala. The Council decided that it was not appropriate to do so at this stage after much debate. 

Major Change of GST Rate in relation to Services Applicable from 1st October 2021 

S.No.	Description	From	To
1.	The GST exemption on products transported by ship and air from India to countries outside India has been extended till September 30, 2022.	–	Nil
2.	Services in the form of granting a National Permit to goods carriages in exchange for a fee.	18%	Nil
3.	Services relating to the 2022 AFC Women’s Asia Cup.	18%	Nil
4.	Services of licensing/rights to broadcast and exhibit original films, sound recordings, radio and television programs (to bring parity between a distribution and licensing services)	18%	Nil
5.	Skill Training for which the government covers 75% or more of the cost (present exemption applies only if Govt funds 100%).	18%	Nil
6.	Printing and production services for recorded media where the publisher provides the material (to bring it on parity with Color printing of images from film or digital media)	12%	18%

Clarification on the Rate of GST on services 

1. Coaching services offered to students by coaching institutes and non-governmental organizations (NGOs) under the central sector initiative “Scholarships for students with Disabilities” are exempted. 
2. The services provided by cloud kitchens/central kitchens fall under the category of “restaurant service,” and are subject to a 5% GST rate [without ITC]. 
3. The supply of ice cream by parlors would be subject to GST at a rate of 18%. 
4. The toll plaza overloading fees are similar to tolls, so, they are exempt from GST. 
5. For GST purposes, the rental of vehicles by State Transport Undertakings and Local Authorities is covered under the term “providing on hire.” 
6. With effect from July 1, 2017, services involving the award of mineral exploration and mining rights were subject to an 18% GST rate. 
7. Admission to amusement parks with rides and other attractions is subject to an 18% GST charge. The GST rate of 28% only applies to the entrance to such facilities as casinos and other gambling establishments. 
8. For the purposes of the item prescribing a 5% GST rate on job work services in connection to food and food products, alcoholic liquor for human use is not considered food and food products. 

Measures to make GST compliance easier 

1. Aadhaar authentication will be required to file for refund claim or an application for revocation of registration cancellation. 
2. The late fee for filing FORM GSTR-1 will be auto-populated and collected in the following open return, FORM GSTR-3B 
3. The refund will be sent into the bank account associated with the PAN used to get GST registration 
4. With effect from January 1, 2022, Rule 59(6) of the CGST Rules will be modified to specify that a registered person will not be authorized to file FORM GSTR-1 if he has not filed FORM GSTR-3B for the previous month. 
5. Under rule 45 (3) of the CGST Rules, the requirement to file FORM GST ITC-04 has been relaxed as follows: 

• Taxpayers with an annual aggregate turnover of more than Rs. 5 crores in the previous financial year must submit ITC-04 once every six months. 
• ITC-04 is required to be filed yearly by taxpayers with an annual aggregate turnover of up to Rs. 5 crores in the previous financial year. 

6. Section 50 (3) of the CGST Act to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” rather than “ineligible ITC availed” in the spirit of an earlier Council decision that interest is to be charged only in respect of net cash liability. It has also been determined that, from July 1, 2017, 18% interest rate would be levied on ineligible ITC that has been claimed and utilized. 
7. Once the proposed clause (aa) of section 16(2) of the CGST Act, 2017 is notified, Rule 36(4) of the CGST Rules, 2017 will be amended to limit ITC availment in respect of invoices/ debit notes to the extent that the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and communicated to the registered person in FORM GSTR-2B. 
8. Unused balances in the CGST and IGST cash ledgers could be transferred between distinct individuals (entities with the same PAN but registered in different states) without having to go through the refund process, subject to certain safeguards.