Time not yet ripe for petrol, diesel to come under GST: Council

The GST Council Friday decided to keep petrol and diesel outside the ambit of GST, extended exemption on payment of tax to various life saving Covid-19 drugs and levied a 5 per cent GST on online food delivery platforms like Swiggy and Zomato but the Centre said a firm no on payment of GST compensation to states beyond July 2022.

The compensation will, however, be collected from the public till March 2026 instead of 2022. It will be used to pay back the interest and principle of Rs 2.69 lakh crore that the Centre borrowed to pay to states totied over losses accruing due to Covid pandemic.

“From June 2022 to March 2026, the cess that will be collected only to be used to pay the interest and principal on the borrowed amount. The GST (Compensation to States) Act says that compensation period will be five years and those five years end in June 2022,” Finance Minister Nirmala Sitharamansaid after the GST Council meeting.

The item (GST on petrol and diesel) came on the agenda for today’s discussion purely due to the direction of Kerala High Court. But the GST Council felt that it was not yet time to bring petro products into GST,” Sitharaman said after chairing the meeting at Lucknow.

This was the first in-person meeting of the GST Council after December 2019.

Several states said they do not want petroleum products to be included in GST now. The Centre will report that to the Kerala High Court, Sitharaman said.

In June, the Kerala High Court, based on a writ petition, had asked the GST Council to decide on bringing petrol and diesel within the GST ambit.

In another major decision, the Council agreed that the online food delivery platforms like Swiggy and Zomato will now pay GST at the rate of 5 per cent. The GST will be charged at point of delivery. Earlier the tax was paid by restaurants.

The Council also decided to extend GST exemption for various life saving Covid-19 drugs till December 31. Further, the GST Council decided to exempt various other non-covid life-saving drugs from GST. Consequently, cancer-related drugs - Keytruda - along with similar other medicines used in the treatment of cancer will now attract 5 per cent GST instead of 12 per cent.

The finance minister said muscular atrophy drugs like Zolgensma and Viltepso, which cost crores of rupees will be exempted from GST levy.

Check out the latest DH videos here: