GST Council Meeting Decisions: Cheaper Cancer Drugs and Snacks

Finance Minister Nirmala Sitharaman chaired the 54th meeting of the GST Council, where they made significant decisions to reduce taxes on certain snacks and cancer medications.

Reduced GST on Namkeen and Cancer Drugs

The government has reduced the GST rate on namkeen (snacks) from 18% to 12%, making popular snacks more affordable. Additionally, it has lowered the GST rate on certain cancer drugs, including Trastuzumab, Deruxtecan, Osimertinib, and Durvalumab, from 12% to 5%.

Increased GST on Car Seats

The government has raised the GST on car seats from 18% to 28%, which will likely cause car seat prices to rise. However, the GST on motorcycle seats remains at 28%.

GST Exemptions for Research and Helicopter Travel

Government-established universities conducting research have been granted a GST exemption on supplies required for their operations. While a 5% GST has been levied on passenger helicopter transport, chartered helicopters will now be subject to an 18% GST.

No GST on Flying Training Institutes

Flying Training Organizations (FTOs) approved by the Directorate General of Civil Aviation (DGCA) will be exempt from GST for their training programs. The government will charge an 18% GST on universities that provide certain recognized services. It will exempt foreign airline branch office imports from GST.

Formation of Ministerial Panel for Insurance Premium GST Review

The GST Council discussed the tax imposed on life and health insurance premiums, deciding to form a ministerial panel to assess the situation. The panel will include representatives from Bihar, Uttar Pradesh, Karnataka, Kerala, and Gujarat. It is expected to submit its report by October of this year.

GST Compensation Cess and Simplification

The council also spoke about the future of the GST Compensation Cess, which compensates states for revenue losses. A ministerial committee will decide whether the cess should continue after March 2026. Finance Minister Sitharaman clarified that if the government continues the cess, it will not call it a “compensation cess.”

B2C E-Invoice System by October 1

In an effort to streamline the GST framework, the council has decided that the B2C (business-to-consumer) GST e-invoicing system will go live on October 1 of this year. The government expects this to improve compliance and ease of operation for both consumers and businesses.