Key Recommendations of 45th GST Council meeting

The 45th GST Council Meeting was held on September 17, 2021 in Lucknow. The meeting was presided by Union Finance and Corporate Affairs Minister, Smt. Nirmala Sitharaman. Key recommendations of the Meeting are as follows:


I. Key recommendations related to change in rate of GST on goods and Services

  • Life-saving drugs Zolgensma and Viltepso used in treatment of Spinal-Muscular Atrophy exempted from GST when imported for personal use.
  • Extension of existing concessional GST rates on certain COVID-19 treatment drugs upto 31st December 2021. (Earlier, valid till September 30, 2021)
  • GST rate on Keytruda medicine for treatment of cancer reduced from 12% to 5%. GST rates on Retro fitment kits for vehicles used by persons with special abilities reduced to 5%. GST rates on Fortified Rice kernels for schemes like ICDS reduced from 18% to 5%.
  • Brick kilns would be brought under special composition scheme with threshold limit of Rs. 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6% without ITC under the scheme. GST rate of 12% with ITC would otherwise apply to bricks.
  • GST rate changes in order to correct inverted duty structure, in footwear and textiles sector will be implemented with effect from 01.01.2022.
  • GST rates on 7 other medicines recommended by Department of Pharmaceuticals reduced from 12% to 5% till 31st December 2021.

II. Key recommendations related to GST law and procedure

  1. Relaxation in the requirement of filing FORM GST ITC-04:

Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under:

  • FORM GST ITC-04 to be furnished once in six months by Taxpayers with annual aggregate turnover in preceding financial year is above Rs. 5 crores;
  • FORM GST ITC-04 to be furnished annually by Taxpayers whose annual aggregate turnover in preceding financial year is up to Rs. 5 crores.
  • Clarification on scope of “intermediary services”;
  • Clarification with respect to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services.A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services;
  • Clarification in respect of certain GST related issues:
    1. From 01.01.2021, the date of issuance of debit note (and not the date of underlying invoice) shall determine the relevant financial year for the purpose of section 16(4) of CGST Act, 2017;
    2. There is no requirement to carry the physical copy of tax invoice in cases where invoice has been generated by the supplier in the manner prescribed under rule 48(4) of the CGST Rules, 2017;
  • Only those goods which are actually subjected to export duty i.e., on which some export duty has to be paid at the time of export, will be covered under the restriction imposed under section 54(3) of CGST Act, 2017 from availment of refund of accumulated ITC.

GST Council has also recommended amendments in provisions of the Act and Rules.

Source: Press Information Bureau.


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