GST: Sops on COVID medicines to continue

18 September 2021, 11:34 am
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The GST Council extended concessional tax rates on COVID-19 medicines, cut tax on cancer drugs and waived GST on import of highly expensive medicines for muscular atrophy, but decided to continue keeping petrol and diesel out of the uniform national tax regime.

The Council, which is headed by the Union Finance Minister and includes representatives from all states and UTs, decided to charge services by cloud kitchens and food delivery platforms like Zomato and Swiggy a 5 per cent GST. From January 1, food delivery apps will have to collect and deposit 5 per cent GST with the government, in place of restaurants, for deliveries made by them. There would be no extra tax burden on the end consumer.

In other major decisions, the regime of paying compensation to states for revenue shortfall resulting from subsuming their taxes such as VAT in the uniform national tax GST, will end in June next year. However, the cess which is currently levied on top of the GST rate on certain luxury and sin goods to fund the compensation amount for states will continue to be levied till March 2026.

The collections will be used to pay off the borrowings that had to be done since 2020-21 to pay for state compensation. Nirmala Sitharaman said COVID medicines such as Remdesivir and Tocilizumab will continue to be charged a concessional GST rate till December 31.