GST Council recommends IGST exemption on COVID-related medical goods, amnesty scheme for relief to taxpayers

The GST Council at its 43rd meeting held on Friday recommended full exemption from IGST on a number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines even if imported on payment basis for donating to the government or on recommendation of state authority to any relief agency.

The exemption shall be valid up to August 31 this year.

Earlier, IGST exemption was applicable only when these goods were imported “free of cost” for free distribution. This will also be extended till August 31.

In view of rising Black Fungus cases, the exemption from IGST has been extended to Amphotericin B.

As regards individual items, it was decided to constitute a Group of Ministers (GoM) to go into the need for further relief to COVID-19 related individual items immediately. The GOM will give its report by June 8.

A Finance Ministry release said that to support the lympahtic filarisis (an endemic) elimination programme being conducted in collaboration with WHO, the GST rate on Diethylcarbamazine (DEC) tablets has been proposed to be reduced from 12 per cent to five per cent.

It said that amnesty scheme has been recommended to provide relief to taxpayers regarding late fee for pending returns.

To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR-3B for the tax periods from July 2017 to April, 2021 has been reduced and waived. Late fee has been capped to a maximum of Rs 500 (Rs 250- each for CGST and SGST) per return for taxpayers, who did not have any tax liability for the said tax periods.

The late fee has been capped to a maximum of Rs 1000 (Rs 500 each for CGST and SGST) per return for other taxpayers. The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between June 1 to August 31, 2021.

In addition to the relief measures already provided to the taxpayers vide the notifications issued on May 5 this year, more relaxations have been provided to the taxpayers. Certain COVID-19 related relaxations are also being provided.

The council has recommended simplification of annual return for 2020-21. The release said that amendments in Section 35 and 44 of CGST Act made through Finance Act, will be notified. This would ease the compliance requirement in furnishing reconciliation statement in form GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for annual return for FY 2020-21.

The filing of annual return in FORM GSTR-9/9A for 2020-21will be optional for taxpayers having aggregate annual turnover up to Rs two crore. The reconciliation statement in FORM GSTR-9C for 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above Rs five crore.

Retrospective amendment in Section 50 of the CGST Act with effect from July 1, 2017, providing for payment of interest on net cash basis, would be notified at the earliest.

The GST Council has recommended amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return filing as the default return filing system in GST

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