5% GST on Food Delivery Apps to Apply Retrospectively
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, is set to clarify the retrospective imposition of 5% GST on delivery charges by food delivery apps like Zomato and Swiggy, effective from 2022. This move, backed by the fitment committee, creates a liability of around ₹750 crore, as past taxes cannot be recovered from consumers. However, future taxes on delivery charges, being a small fraction of order costs, are unlikely to significantly impact consumers.
Tax on Floor Space Index (FSI) Charges
Builders will now be liable to pay GST on charges paid to local authorities for Floor Space Index (FSI) and additional FSI. The council clarified that these services are commercial in nature, aiding businesses, and attract 18% GST. While input tax credit is available, there is no justification for exemption, as concluded by the fitment committee.
Tax Reduction on Gene-Modified Cell Therapy
Providing a major relief, the council is expected to reduce GST on gene-modified cell therapy for advanced blood cancer treatment from 12% to nil. This decision aims to make cutting-edge medical treatments more accessible.
No Tax Reduction on EV Components
A proposal to lower GST on electric vehicle (EV) components from 18% and 28% to 5% has been rejected by the council. However, clarity will be provided that penal charges levied by banks and finance companies, regulated by the RBI, will not attract GST.
