gst council meeting: gst council meeting today, know about 5 new faces in gst council: 7 months later gst council meeting today, know about 5 new faces involved in it
- Goods and Services Tax (GST) Council meeting today after 7 months
- Proposal to give tax exemption to Kovid-19 vaccines will be considered
- Some states have suggested keeping it tax free or 0.1 percent tax.
- After the assembly elections, the attitude of the states ruled by the opposition parties has changed.
The GST Council (GST Council) is meeting today after a gap of 7 months. Although there are issues related to the economy on its agenda, but there is a possibility of discussion on the political line in it. Whether it is the matter of tax on vaccines or the issue of giving more powers to the states in the council, politics is likely to dominate them. The biggest issue on its agenda is whether goods, vaccines and medicines related to Kovid should be taxed or not.
This time 5 new faces are joining the GST Council headed by Union Finance Minister Nirmala Sitharaman. After the recent assembly elections in several states, new faces are joining the GST Council. These include Puducherry Chief Minister N Rangaswamy, Bihar Deputy Chief Minister Tarkishore Prasad, Assam Finance Minister Ajanta Niyog, Tamil Nadu Finance Minister Palanivel Tyagarajan and Kerala Finance Minister KN Balagopal.
Opposition parties are tough
The defeat of the BJP and its allies in Tamil Nadu and West Bengal in the Assembly elections has changed the attitude of the states ruled by the opposition parties. They are demanding zero tax on the Kovid vaccine. Vaccines currently attract 5% GST. Some states have suggested keeping the corona vaccine completely tax-free or imposing a nominal tax of 0.1 percent. The meeting will also discuss the proposal to reduce or eliminate tax on goods related to Kovid.
The fitment panel met last Thursday to consider suggestions to reduce or eliminate GST on the corona vaccine and its associated materials. The panel comprises officials from the Centre, states and the GST Council Secretariat. The panel has made a list of the advantages and disadvantages of the change in GST and the effects on the cost of the vaccine. The GST Council will consider this.
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Will there be a tax rebate on the vaccine
Two officials with knowledge of the matter said that the proposal of giving exemption in GST on the vaccine needs to be considered deeply. There have been several cases when such a move has led to an increase in prices on account of input tax credit. An official said that all aspects of exempting the tax completely on the vaccine and levying a minor tax have been widely discussed. It will now be placed before the council. Manufacturers cannot claim input tax credit if any item is exempted from GST. In such a situation, prices may be higher without GST as the cost will include all input taxes. Input tax credit from 0.1% nominal tax will be allowed to be claimed.
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Prateek Jain, Partner at PwC, said that zero is a better option than GST exemption. But the zero rating under the GST laws is limited to exports and supplies to SEZs. It will take time to amend. Therefore, the government may consider the option of giving a refund or subsidy on the vaccine at the minimum rate or GST. The Haryana government has recently proposed such a scheme on relief material related to corona. Such refunds or subsidies can cause administrative problems.
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