GST Council Meeting Today: What Did Nirmala Sitharaman Announce? Check Out The Key Updates On Tax Rates

The Goods and Services Tax (GST) rates for cancer drugs and savory food items have been reduced, according to an announcement from Union Finance Minister Nirmala Sitharaman following the 54th GST Council meeting. The council has also established a group of ministers (GoM) to review and recommend changes to GST rates on health insurance.

In a significant move to lower the cost of cancer treatment, the GST rate on cancer drugs has been reduced from 12% to 5%. This change applies to various medications, including Trastuzumab Deruxtecan, Osimertinib, and Durvalumab. Additionally, the GST rate on namkeens and extruded savory foods will be reduced from 18% to 12% starting prospectively.

The GST Council also discussed the future of the compensation cess, which is set to expire in March 2026. A GoM will be formed to examine this issue and recommend how the cessation of this cess will be handled. The extended compensation cess, which has been used to repay back-to-back loans and service their interest, is expected to be cleared by January 2026. The remaining compensation cess will be collected until March 2026.

Another key decision was the formation of a GoM to focus on the GST rates for medical and health insurance. This GoM, headed by the Deputy Chief Minister of Bihar, will include new members and is tasked with providing a report by the end of October 2024. The GST Council will review this report and make final decisions in a subsequent meeting scheduled for November.

In addition to these changes, the GST Council recommended exempting research and development services provided by government-affiliated educational institutions from GST. This exemption applies to universities and research centers established by central or state laws, or those with income tax exemptions. These institutions will no longer be required to pay GST on research funds received from both public and private sources.

These updates reflect the GST Council’s ongoing efforts to reduce the tax burden on essential medical treatments and essential food items while addressing future fiscal policies related to compensation cess and health insurance.

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