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The 54th meeting of the Goods and Services Tax (GST) Council brought significant changes in tax rates on essential items and healthcare services. The most notable decision was the reduction of GST on cancer drugs from 12% to 5%, a move aimed at making treatment more affordable for patients. This reduction applies to crucial medications such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab, providing much-needed relief to individuals battling cancer.
Another key decision was the reduction of GST on namkeen and savory food items from 18% to 12%. This move is likely to benefit consumers who rely on these items as part of their daily diet. The council's decision to implement this change prospectively, meaning it takes effect from the date of announcement onwards, ensures a smoother transition and avoids any retroactive adjustments.
The council also established two Groups of Ministers (GoMs) to address crucial aspects of the GST regime. A GoM was formed to examine the future of compensation cess, which is set to expire in March 2026. The council aims to finalize the repayment of back-to-back loans and interest by January 2026, leaving only two months of compensation cess collection before its expiration. A second GoM was established to recommend rate rationalization on medical health insurance. This GoM is headed by the Deputy Chief Minister of Bihar and is tasked with submitting its report by the end of October 2024. The GST Council will then finalize its decision based on the GoM's recommendations in its November meeting.
Furthermore, the council decided to exempt government-affiliated educational institutions from paying GST on the supply of research and development services. This exemption applies to universities and research centers established by central or state governments, as well as those that have obtained income tax exemption. This move aims to streamline the research ecosystem and promote further academic and scientific advancement. The exemption applies to both government and private funding received by these institutions.
The decisions taken by the GST Council highlight a commitment to addressing concerns related to healthcare costs, consumer affordability, and the research landscape. The reduction of GST on cancer drugs and namkeen items reflects a focus on making essential goods and services more accessible. The formation of GoMs to examine compensation cess and health insurance suggests a proactive approach to navigating the complexities of the GST regime. The exemption granted to government-affiliated educational institutions underscores the council's dedication to promoting scientific and academic progress.
Source: GST council meet: Rates on cancer drugs, namkeen slashed; key decisions