Peoples are relieved that the GST Council has lowered the tax on cancer medications to 5% and lowered the rates on namkeen. The council will also soon complete rate reductions for health and life insurance, which will be significant choices meant to reduce expenses in vital areas.
Along with senior officers from the Ministry of Finance & States/UTs, Finance Ministers of States & UTs (with legislature), Chief Ministers of Goa, Meghalaya, Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana, and Union Minister of State for Finance Shri Pankaj Chaudhary also attended the meeting.
GST Council Decision :
The GST Council suggested, among other things, that the GST tax rates be changed, that individuals be given relief, that trade be facilitated, and that GST compliance be simplified.
The GST Council, at its 54th meeting on Monday, decided to form a Group of Ministers (GoM) to discuss tax reduction after the controversy regarding the 18% GST on health and life insurance premiums. By the end of October this year, the panel will present its findings, and the Council will decide what to do with it at its next meeting in November.
During the meeting led by Finance Minister Nirmala Sitharaman, the GST Council deliberated over three status reports submitted by the Group of Ministers concerning online gambling, real estate, and rate rationalization, in addition to making numerous significant decisions.
The finance minister Nirmala Sitharaman indicate that a new Group of Minister(GoM) on rate reduction will be formed with current members to examine rate reductions for life and health insurance.
Namkeens and Extruded/Expanded Savoury food products : The GST rate for savoury or salted extruded or expanded products falling under HS 1905 90 30 will be lowered from 18% to 12% in line with namkeens, bhujia, mixture, chabena (pre-packaged and labelled), and similar edible preparations in ready-to-eat form that are classified under HS 2106 90.
The GST rate of 5% will continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion.
Cancer Drugs : The GST rate on cancer drugs namely, Trastuzumab Deruxtecan, Osimertinib and Durvalumab to be reduced from 12% to 5%.
Life and Health insurance : The formation of a Group of Ministers (GoM) decides from GST Council to examine the issues surrounding GST on health and life insurance comprehensively was suggested by the GST Council. Gujarat, Meghalaya, Goa, Telangana, Tamil Nadu, Bihar, Uttar Pradesh, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, and Punjab are the members of the GoM. The report must be submitted by the GoM by the end of October 2024.
Transport of passengers by helicopters : Informing GST @ 5% on carriage of passengers by helicopter on seat share basis and regularization of GST for past time on ‘where available’ basis. Also to clarify that charter of helicopter will attract 18% GST.
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Car seats now have a 28% GST tax instead of the previous 18% rate. To achieve parity with motorcycle seats, which are already subject to a 28% GST rate, this uniform rate of 28% will be applied prospectively for automobile seats.
An important step forward was taken by the Council when it decided to exempt the use of grants from the government or private sector for research and development activities provided by government agencies, research associations, universities, colleges, or other institutions that were informed under section 35 of the Income Tax Act.
According to Finance Minister Nirmala Sitharaman, the Center is expected to pay back loans to states for GST compensation in full by January 2026. The overall cess receipts are projected to be Rs 8.66 lakh crore, with an estimated ₹40,000 crore left over after repayments.
