GST Council Meeting: GoMs To Address Tax Rates And Compensation Cess, Tax On Cancer Drugs, Namkeen Reduced

• Sitharaman announced the formation of two new groups of ministers that will address the issues related to tax rates and compensation cess.

• GST rates on specified cancer drugs have been reduced from 12% to 5%, and that on namkeen and similar savoury items has been decreased from 18% to 12%.

• The council has slashed tax on research grants for universities and other research institutions.

• Sitharaman addressed various questions from states concerning insurance policies. It involved whether to provide tax exemptions or to entirely abolish the tax. Since there were various groups involved, she highlighted the complexities of implementation.

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“While the decision on a lower rate or exemption for health insurance is expected by November, it is expected that the decision would consider all forms of health/ medical insurance including family floaters, group policies, optional add-on coverages etc. so that insurance companies have clarity on the changes they need to incorporate, “according to MS Mani, Partner at Deloitte India.

He also added that the exemption given to research grants will ensure that more money flows into the R&D activity.

Nirmala Sitharaman said that many states have requested to host GST Council meeting— Telangana, Meghalaya and Kerala among them.

Council will take a decision on which state will host the meeting, she said.

Source: GST Council meet

Finance Minister Sitharaman spoke about the new B2C e-invoicing initiative. It will initially allow suppliers to voluntarily use a portal similar to the existing B2B invoicing system to issue invoices. This system will enable customers to review their invoices and facilitate the issuance of refunds, she said.

Currently, it is a pilot project, but it is expected to help reduce tax evasion and assist the customs department in its operations, Sitharaman said.

Source: GST Council meet

FM Sitharaman highlighted that all states including the West Bengal finance minister supported her decision on GST exemption on research grants.

Source: GST Council meet

Sitharaman addressed many questions from states regarding insurance policies. They discussed whether to offer exemptions or to abolish the tax altogether.

Since various groups are involved, the complexities of implementation were highlighted.

Source: GST Council meet

Revenue Secretary, Sanjay Malhotra said that no discussion took place on retrospective tax imposition on online gaming companies and on card payment up to Rs 2000.

Source: GST Council meet

Sitharaman said that GST on transactions between foreign airlines and related parties will be reduced from 18%.

Source: GST Council meet

The Revenue Secretary said that the B2C transactions to be brought under e-voicing. Also, rate on car and motorcycle seats to be increased from 18% to 28%.

Source: GST Council meet

Sanjay Malhotra, the Revenue Secretary, announced that an exemption has been introduced for affiliation charges collected by education boards from government schools.

Additionally, the renting of commercial property by unregistered to registered persons will now fall under the Reverse Charge Mechanism, he said.

Source: GST Council meet

The Committee of Secretaries decided today to form a new committee to determine the future of the Integrated Goods and Services Tax. Currently, there is a negative balance in IGST. To address this, a committee chaired by the Additional Secretary (Revenue) will be established.

Many states have an excess of IGST, so efforts will be made to retrieve the negative balance from some states. The new committee will also explain the modulation and formulation of IGST to interested parties.

Source: GST Council meet

The finance minister announced that the GST on namkeen and similar savory items has been reduced from 18% to 12%.

Source: GST Council meet

Nirmala Sitharaman announced that the reduction of GST rates on specified cancer drugs is undertaken

It's reduced from 12% to 5%.

Source: GST Council meet

Nirmala Sitharaman announced that a new Group of Ministers has been established to address the compensation cess. The cess will be extended until March 2026 to help service loans and interest payments.

By January 2026, the government plans to clear back-to-back loans and interest. As a result, only two months' worth of compensation cess will remain by March 2026 before it is phased out.

Source: GST Council meet

Nirmala Sitharaman announced that two new Groups of Ministers have been established. One GoM will focus on medical and health insurance, while another will handle rate rationalization.

The GoM on medical and health insurance will be led by the Deputy Chief Minister of Bihar and is tasked with additional responsibilities. Both GoMs are expected to submit their reports by the end of November, she said.

Source: GST Council meet

Two status reports have been submitted. The Group of Ministers for rate rationalization will meet on Sept. 23.

Source: GST Council meet

Union Transport Minister Nitin Gadkari wrote to Sitharaman on the issue of taxing insurance premium. The issue was discussed in Parliament with opposition members demanding an exemption of GST on health and life insurance premiums.

Punjab Finance Minister, Harpal Singh Cheema mentioned that Sikkim and Goa have raised issue of GST on online gaming, but no consensus given on reducing it.

Most states are in favour of reducing health, life insurance premiums to 5% while many in favour of abolishing it for senior citizens and for differently abled, he said.

Source: GST Council meet

Research grants are now exempted from GST, says Atishi, Delhi Finance Minister.

The council has not yet agreed on whether to impose GST on digital payments over ₹2,000, she said.

Source: GST Council meet

The monthly gross collections from the Goods and Services Tax have stabilized at around Rs 1.75 lakh crore, as compared to the Rs 90,000 crore collected in the first year post the introduction on July 1, 2017.

The GST Council has come to a broad consensus on GST rate reduction on health and life insurance, but modalities would be decided in the next council meeting, PTI said quoting sources.

The monthly GST collections have seen an uptrend which provides room for taking taxpayer-friendly measures, the above-mentioned sources said adding that most states were on board.

Delhi Finance Minister Atishi on Sunday said she will point out the issue of imposition of GST on research grant received by educational institutions in the 54th GST Council meeting.

"The (central) government has reduced budget allocation for research from 2014 to 2024. If an educational institution gets research grant from a private entity, the government imposes 18% GST, which is not justified. We will oppose it," she said while addressing a press conference.

(With PTI inputs)

In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health insurance premium, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium.

(With inputs from PTI)

Agarwal further said the Council has referred the issues of levy of 18% GST on payment aggregators, like BillDesk and CCAvenue, for small digital transactions up to Rs 2,000, via debit and credit cards to the fitment committee.

(With inputs from PTI)

Uttarakhand Finance Minister Premchand Aggarwal said the goods and services tax on shared helicopter services was cut to 5% from 18% and had been sent to the fitment committee for approval. He said the move would boost tourism in pilgrimage hotspots, such as Kedarnath and Badrinath.

Moreover, research grants have been fully exempted from the GST and referred to the fitment committee.

Source: GST Meet

The Goods and Services Tax Council is expected to deliberate on a host of issues, including taxation of insurance premiums, suggestions on rate rationalisation, and a status report on online gaming, as per reports.

The fitment committee, which includes Centre and state tax officials, will present a report on GST levied on life, health, and reinsurance premiums, as well as the revenue implications, according to PTI, quoting sources.

The GST Council is chaired by Finance Minister Nirmala Sitharaman and comprises state ministers. It will decide on whether to reduce the tax burden on health insurance from the current 18% or exempt certain categories of individuals, like senior citizens.

Chief Ministers of Goa and Meghalaya and Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana are also present.