Major exemption to drugs but petrol & diesel not yet in GST; 'Not the time,' says FM

Finance Minister Nirmala Sitharaman on Friday announced that petrol and diesel will not be brought under the ambit of the GST regime just yet. Explaining the decision of not including the fuel in the GST, as had been claimed, Nirmala Sitharaman stated that subsuming the current excise duty and VAT into one national rate would impact revenues.

'The GST Council, keeping this factor in mind, felt now is not the time to bring Petrol and Diesel under GST," the Union Finance Minister concluded. The statement comes after the 45th meeting, and the first in-person meeting of the Goods and Service Tax Council Council (GST) since the COVID pandemic broke out, conducted in Lucknow earlier in the day, in which decisions regarding GST with respect to various goods and services were taken. 

Major GST exemption to drugs 

In the meeting that took place between the Union Finance Minister and her state counterparts, it was decided life-saving drugs like Zolgngelsma and Viltepso will be exempted from GST. Announcing the decision, Nirmala Sitharaman said, "I am giving the names of two because those two are very expensive drugs - Zolgensma and Viltepso. These two are very important drugs which cost something like Rs 16 crores. So the council has decided to grant exemption from GST for these 2". 

Besides these drugs, the Council decided to give certain COVID-related drugs at concessional GST rates. It is pertinent to mention here that the Council had been providing both COVID-related drugs and equipment at concessional GST till now, but while it has continued to provide drugs at concession, the concession on equipment have been discontinued.  

For the drugs, Amphotericin B & Tocilizumab will continue to be provided at  0% GST, while Remdesivir and anticoagulants like Heparin will continue to be provided at 5%. These concessional rates, which were valid till September 30, are now being extended till 31st December 2021. 

Other COVID-related drugs like Itolizumab, Posaconazole, Infliximab, Favipiravir, Casirivimab & Imdevimab, 2-Deoxy-D-Glucose, and Bamlanivimab & Etesevimab have been given a 5% or more GST reduction. 

Also, the Council cut the GST rate from 12 percent to 5 percent on cancer-related rugs like Keytruda. 

Other key decisions:- 

• E-commerce operators Swiggy, Zomato to pay GST on restaurant service supplied via them; GST to be charged at the point of delivery. 
• Transport of export goods by vessel, air exempted from GST.
• GST on Biodiesel supplied to OMCs for blending with diesel decreased from 12% to 5%
• GST on Miscellaneous goods of paper like cards, catalog printed material increased from 12% to 18%
• GST on Pens increased from 12% to 18%

Read the Press Release of the Council to know more 

Press_Release_45_GSTC_210917_212016 by Republic on Scribd