NEW DELHI: The Goods and Services Tax rates on cancers drugs has been brought down from 12% to 5%, Union finance minister Nirmala Sitharaman announced on Monday after the conclusion of the 54th GST council meet. Further, GST rates on namkeens and savoury food items has also been prospectively reduced from 18% to 12%.
A group of ministers (GoM) has also been set up to recommend rate reduction on medical health insurance.It is set to submit its report by October end.
Key decisions of the GST council meet:
GoM for compensation cess
The GST council is set to form a GoM to examine and determine the approach for addressing the compensation cess, which is set to expire after March 2026.
“We had discussed about the compensation cess and it was understood and it is clearly till March 2026 is when we can collect the compensation cess which is the extended compensation cess. The extended compensation cess is being collected to repay the back-to-back loans which were taken and also to service the interest on it. Probably by January 2026 itself, we will be clearing the back-to-back loan and the interest and therefore till March which is about two months of compensation cess, which would be leftover but the compensation cess ends by March 2026.”
GoM for health insurance
The GST council meet decided to form new GoM on medical and health insurance. The council is set to meet again in November to decide on the rate reduction on health insurance.
“2 new GoMs (Group of Ministers) have been decided. One is on the medical and health insurance. It will be the rate rationalisation GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose. We have told them that they will look into this matter and come up with a report by the end of October 2024. The GST council which will meet in November will finalize based on this report which will come from the GoM,” Sitharaman said.
GST rates brought down on cancer drugs, savoury food
In order to reduce the cost of cancer treatment, “GST rates on cancer drugs are also being brought down. It’s being reduced from 12% to 5%,” Sitharaman said.
“Then also decision on Namkeen‘s extruded expanded savory food items. GST rate on these is being reduced prospectively, not retrospectively, prospectively from 18 to 12%,” she added.
No GST for govt affiliated educational institutions
Funds given to government affiliated universities i.e., “Universities and research centers which have been established by a law of the central government, two, universities and research centers established by a law of the state governments or those which have obtained income tax exemption can receive research funds both from public which is government and from private and they shall not pay GST,” Sitharaman said.
“They are exempted from paying the GST,” she added.
A group of ministers (GoM) has also been set up to recommend rate reduction on medical health insurance.It is set to submit its report by October end.
Key decisions of the GST council meet:
GoM for compensation cess
The GST council is set to form a GoM to examine and determine the approach for addressing the compensation cess, which is set to expire after March 2026.
“We had discussed about the compensation cess and it was understood and it is clearly till March 2026 is when we can collect the compensation cess which is the extended compensation cess. The extended compensation cess is being collected to repay the back-to-back loans which were taken and also to service the interest on it. Probably by January 2026 itself, we will be clearing the back-to-back loan and the interest and therefore till March which is about two months of compensation cess, which would be leftover but the compensation cess ends by March 2026.”
GoM for health insurance
The GST council meet decided to form new GoM on medical and health insurance. The council is set to meet again in November to decide on the rate reduction on health insurance.
“2 new GoMs (Group of Ministers) have been decided. One is on the medical and health insurance. It will be the rate rationalisation GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose. We have told them that they will look into this matter and come up with a report by the end of October 2024. The GST council which will meet in November will finalize based on this report which will come from the GoM,” Sitharaman said.
GST rates brought down on cancer drugs, savoury food
In order to reduce the cost of cancer treatment, “GST rates on cancer drugs are also being brought down. It’s being reduced from 12% to 5%,” Sitharaman said.
“Then also decision on Namkeen‘s extruded expanded savory food items. GST rate on these is being reduced prospectively, not retrospectively, prospectively from 18 to 12%,” she added.
No GST for govt affiliated educational institutions
Funds given to government affiliated universities i.e., “Universities and research centers which have been established by a law of the central government, two, universities and research centers established by a law of the state governments or those which have obtained income tax exemption can receive research funds both from public which is government and from private and they shall not pay GST,” Sitharaman said.
“They are exempted from paying the GST,” she added.
