GST Compendium – July 2021

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The July edition of GST Compendium captures the changes made by the government with respect to GST for COVID-19 relief.

Key highlights of the publication

  • Important updates/announcements: The GST Council, in its 44th meeting held through video conferencing on 12 June 2021, took decision regarding reduction in GST rates on goods being used in COVID-19 relief and management. GST exemption has been provided to certain medicines which were leviable to GST at 5%. Furthermore, there has been a reduction in GST rate for drugs recommended by the Ministry of Health and Family Welfare (MoHFW) and the Department of Pharma (DoP) for COVID-19 treatment.
  • Key judicial pronouncements: The Apex Court has admitted the plea filed by the Revenue, challenging the decision of the Gujarat High Court quashing levy of Integrated Goods and Services Tax (IGST) on ocean freight under reverse charge. The levy of IGST on ocean freight has been a matter of litigation since inception.
  • Decoding advanced rulings: The Kerala Authority for Advance Ruling (AAR) observed that the applicant is engaged in placement of specified medical instruments at premises of unrelated customers, such as hospitals and labs, for their use without transfer of ownership and consideration for a specified period. Further, such placement is against an agreement between the applicant and the hospitals for an obligation of minimum purchase of certain products from the applicant. Therefore, the AAR held that such placement constitutes a ‘supply of services’ and not ‘movement of goods otherwise than by way of supply’. Therefore, such transaction shall be taxable under the Goods and Services Tax (GST).
  • Experts column: We share our views on the challenges faced by the media and entertainment industry with respect to the taxability of copyrights.