New Delhi: In a significant move that will directly impact the healthcare sector, the GST Council, under the leadership of Finance Minister (FM) Nirmala Sitharaman, has announced a substantial reduction in the GST rate on cancer drugs, bringing it down to 5 percent from the previous 12 percent.
The reduction has also been announced on nankeens to 12 percent from 18 percent.
The GST Council also announced setting up a Group of Ministers (GoM) to slash the life and health insurance tax rate and reduce the GST on cancer drugs and ‘namkeens’ (selected snacks).
Under the leadership of Bihar Deputy Chief Minister Samrat Choudhary, the panel on GST rate rationalisation is set to play a crucial role in the Group of Ministers (GoM) on life and health insurance. This underscores the government’s commitment to making tax policies more equitable and beneficial for the public.
The 54th GST Council meeting has reached a “broad consensus” to provide significant relief to individuals and senior citizens. This is evident in the decision to revise the GST applied to health insurance premiums, a move that will directly impact their financial burden.
The current GST rate on health and life insurance policies is 18 percent.
The members also agreed to form a GoM on compensation cess.
“The GST Council has agreed to form a GoM, which will now take it up to study and decide on how to move forward on compensation of cess, which will cease after March 2026,” said FM Sitharaman.
The total cess collection projected until March 2026 is Rs 8.66 lakh crore.
After settling the loan payments, a projected surplus of around Rs 40,000 crore is expected, which gives reason for optimism.
Revenue Secretary Sanjay Malhotra said that the GST compensation cess may be discontinued after the debt repayments.
At a press conference after the meeting, Malhotra also announced a decision to exempt foreign airline companies’ import of services from GST, making them feel included.
FM Sitharaman said universities and research centres established by central or state government laws or those granted income tax exemptions will now be exempt from paying GST on research funding.
The GST panel also decided to introduce business-to-customer (B2C) GST invoicing. This new system for GST invoice management will take effect from October 1.
It was also announced that GST on car seats will surge from 18 percent to 28 percent.
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–IANS
