NEW DELHI: The 54th GST Council, chaired by Union Finance Minister Nirmala Sitharaman, announced a series of tax cuts on Monday, offering relief across several sectors including healthcare, food, and travel. The changes will apply prospectively. Here’s a summary of what’s set to get cheaper:
Key Items and Services with Reduced GST:
- Cancer Drugs:
- The GST rate on cancer drugs like Trastuzumab Deruxtecan, Osimertinib, and Durvalumab has been slashed from 12% to 5%, making life-saving drugs more accessible.
- Namkeens and Savory Food Products:
- The tax rate on namkeens and other savory items will be reduced from 18% to 12%. The GST rate for unfried or uncooked snack pellets remains at 5%. Experts have praised the decision for its positive impact on health outcomes in India.
- Helicopter Travel for Religious Purposes:
- The GST on helicopter services for religious destinations like Kedarnath and Badrinath has been lowered from 18% to 5%, providing clarity on this previously ambiguous category.
- Metal Scrap:
- A Reverse Charge Mechanism (RCM) will be introduced for the supply of metal scrap by unregistered persons. The recipient, who is liable to pay under RCM, must pay the tax even if the supplier is below the tax threshold.
- Car and Motorcycle Seats:
- The GST on car seats, currently taxed at 18%, will increase to 28%, bringing it in line with the GST rate on motorcycle seats. The uniform rate will apply prospectively.
- Research Funding:
- The Council has exempted GST on research grants for higher educational institutions and research centers established by central or state laws, following concerns raised by show-cause notices sent to academic institutions.
Other Announcements:
- Imports of services by foreign airlines from related entities abroad, provided without consideration, have also been exempted from GST.
Deferred Decisions:
- The anticipated reduction in GST on health insurance premiums has been postponed. A Group of Ministers (GoM), led by Bihar’s Deputy Chief Minister Samrat Choudhary, will review the issue and make recommendations by the end of October.
The next GST Council meeting on rate rationalization is scheduled for September 23, with further discussions planned on the treatment of collections from the compensation cess.
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