Swiggy and Zomato will pay GST on restaurant services provided through them: FM

The almighty GST Council decided on Friday to impose a tax on food delivery platforms such as Swiggy and Zomato even as it extended preferential tax rates on certain COVID-19 drugs by three months until December 31, said Union Finance Minister Nirmala Sitharaman.

The Council, which includes Sitharaman and his state counterparts, has decided to continue to exclude petrol and diesel from the scope of the GST, as the merger of the current excise duty and VAT into one national rate alone would have an impact on revenues.

Sitharaman said 5% GST will be levied at the point where delivery is made by Swiggy and Zomato.

“With respect to Swiggy-type operators, it has been decided that since the location where the food is delivered will be the tax collection point, the Swiggy-type operator collecting the tax will pay the GST on it,” said Sitharaman in Chance Now.

Briefing reporters on the decisions taken by the Board at a meeting after the conclusion of the 45th Board meeting, and the first in a physical format after the start of the Covid-19 pandemic, she said the GST had been exempted on muscle atrophy drugs like Zolgensma and Viltepso which cost crores of rupees.

It extended the period of preferential GST rates on certain COVID-related drugs by three months until Dec. 31, but decided not to give the same benefit to medical equipment. The tax rate on amphotericin B, tocilizumab was reduced to “nil”, while remdesivir and heparin were reduced to 5% in June 2021, which has now been extended until December 31 2021 from the current September 30.

“We have seen in the last year and probably earlier that some life-saving drugs, which are not related to Corona and are very expensive. Exemptions have been granted for these drugs. I am giving the names of two because these two -there are very expensive drugs – Zolgensma and Viltepso.These two very important drugs cost something like Rs 16 crore.So the board has decided to grant GST exemption for these two drugs. muscle atrophy treatment, on the recommendation of the Ministry of Health and the Department of Pharmaceuticals, are also exempt from IGST upon import for personal use,” Sitharaman said.

The concessionary regime for certain medical equipment will end on September 30.

In addition, the Council reduced the GST rate from 12% to 5% on cancer blankets and fortified rice grains to 5% from 18%.

The rate of GST on biodiesel intended for blending with diesel was reduced from 12% to 5%, while the national license fee for freight transport was exempted from GST.

The import of leased aircraft has also been exempted from paying I-GST, the finance minister said.

“The GST board felt that now was not the right time to include petroleum products in the GST,” she said.

The committee decided to levy 18% GST on all kinds of pens. Specified renewable energy appliances will be subject to a 12% tax.

The GST Council has also recommended new tariffs for footwear and textiles from January 1.

FM Sitharaman said a group of Ministers of State (GoM) will review issues related to tariff rationalization and make recommendations in 2 months.

GST due on the importation of aircraft or other goods imported on lease will now be exempt from double taxation.

Transportation of export goods by sea and air was exempt from GST until September 30. This exemption was granted due to the difficulties encountered by exporters in obtaining a refund of the ITC (input tax credit) due to technical problems on the GST portal. This exemption is extended for another year, FM said.

Here are some decisions made by the GST Council:

1) Pens to attract a single rate of 18% GST, 12% GST on specified renewable energy sector appliances.

2) The GST Board cuts tax rates on drugs used in the treatment of cancer from 12% to 5%

3) GST rate on biodiesel for blending with cut diesel from 12% to 5%

4) The GST Board waives the national permit fees charged by states for the operation of freight transport

5) GST Council agrees to correct reverse duty structure on footwear and textiles from 1 January 2022

6) GST on adaptation kits for vehicles used by divyang or disabled persons reduced to 5%

7) The GST rate on fortified rice grains that can be used in programs such as the Integrated Child Development Services program has been reduced from 18% to 5%.

8) Fully State/Central Government funded training programs exempt from GST

9) The GST Council has also granted exemptions to many life-saving drugs used to treat children

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