The meeting will cover topics on compensation shortfall, rates on essential Covid supplies
On May 28, the GST Council is expected to review tax rates on Covid-related medications, oxygen equipment, and vaccines. The meeting is expected to cover a variety of topics, including the compensation system for states' GST revenue shortfalls in the current fiscal year, which began on April 1. The 43rd GST Council meeting will be held by video conference on May 28, 2021, and will be chaired by Finance Minister Nirmala Sitharaman.
“The meeting will be attended by MOS Anurag Thakur besides Finance Ministers of States and UTs and senior officers from Union Government and states,” the office of Nirmala Sitharaman tweeted. A virtual GST Council meeting was demanded earlier this month by West Bengal Finance Minister Amit Mitra and Punjab Finance Minister Manpreet Singh Badal. A Council meeting is required to take place at least once every quarter of the fiscal year. Since October 5 of last year, the panel has not met. Sonia Gandhi, the Congress's working president, asked last month that all life-saving medication, equipment, and equipment used to treat Covid-19 patients be GST-free. The Trinamool Congress, led by Mamata Banerjee, has made a similar demand. Sitharaman had ruled out exempting Covid vaccines, medicines, and oxygen concentrators from GST saying such an exemption will make the lifesaving items costlier for consumers as manufacturers will not be able to offset the taxes paid on inputs.
Currently, domestic supplies and commercial imports of vaccines attract 5 per cent Goods and Services Tax (GST), while Covid drugs and oxygen concentrators attract a 12 per cent levy. In the previous fiscal year, the Centre paid states Rs 70,000 crore in GST compensation. This is in addition to the Rs 1.10 lakh crore provided to states through the special borrowing mechanism to compensate them for the GST collection shortfall this fiscal year. Compensation of up to Rs 63,000 crore is still owed for the fiscal year 2020-21, which concluded on March 31, 2021. The impact of the pandemic's second wave on GST revenue is likely to be discussed at the next GST Council meeting on May 28.