Lucknow: Union Finance Minister Nirmala Sitharaman on Friday said that applicability of concessional GST rates on Covid-19-related medicines has been extended till December 31, 2021.

The duty exemption and concessional rates for Covid and related medicines was applicable till September 30

The duty exemption and concessional rates for Covid and related medicines was applicable till September 30.

Addressing the media after the conclusion of the Council’s 45th meeting, and the first in a physical format after start of the Covid-19 pandemic, she said: “We have taken a few people friendly decisions…,”

Sitharaman said that the council has granted tax exemption on drugs to treat muscular atrophy imported for personal use only, and reduced the duty on drugs for cancer treatment from 12 per cent to 5 per cent.

The GST Council has agreed to levy compensation cess for an extended period upto March 2026 to enable the Centre to repay the loans, including principal and interest taken, to compensate states for GST collection shortfall.

As per the GST legislation, states were to be compensated by the Centre for a period of five years till July 2022 for any shortfall in revenue due to GST implementation.

But as the compensation shortfall enlarged during the pandemic, the Centre has borrowed funds to provided it to states as alternate to compensation in FY 21 and more borrowings are expected in FY22.

Finance Minister Nirmala Sitharaman said extended levy of compensation cess beyond July 2022 will only be utilised to pay on the loan amount as compensation under legislation is only required to be paid through cess collection.

GST rate on locomotives and certain railway parts has been increased from 12% to 18%, said Sitharaman. GST Council had also reduced tax rates on medicines used in cancer treatment from 12% to 5%.

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

GST rate on bio-diesel for blending in diesel was reduced to 5 per cent from 12 per cent, while the national permit fee for goods carriage has been exempt from GST.

Import of leased aircraft have also been exempted from payment of I-GST, the finance minister said.

“GST Council felt it was not the right time to include petroleum products in GST,” she said.

The panel decided to levy 18 per cent GST on all sorts of pens. Specified renewable sector devices will be charged 12 per cent tax.

GST Council also recommended new footwear and textile rates from January 1.