GST Council Meeting Highlights: Council reduces rate on cancer drugs to 5% from 12%

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GST Council clarifies that car seats are classifiable under 9401 and attract a GST rate of 18%. GST rate on car seats classifiable under 9401 to be increased from 18% to 28%. This uniform rate of 28% will be applicable prospectively for car seats of motor

cars in order to bring parity with seats of motorcycles which already attract a GST rate of 28%.

GST exemption on research grants to higher education institutions is a major boost that shall not only increase research outcome but also achieve global tax parity. Indian academia is hugely relieved and on behalf of eligible universities & institutions.

GST Council clarifies that Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways would be classified under HSN 8415 attracting a GST rate of 28%.

The government's move towards rate rationalization, introduction of B2C invoicing and approval of invoice management systems clearly indicate its commitment to reforming the system. These steps aim to enhance transparency and plug loopholes. As the government continues its digitalization efforts, it is crucial for the industry to prepare for GST 2.0 and strengthen their systems accordingly. The exemption from GST for research funding to universities and the reverse charge tax on import of services from related party or Head Office by foreign airline in India highlight the government's dedication to resolving industry disputes, says Saurabh Agarwal, Tax Partner, EY India

Saurabh Agarwal, Tax Partner, EY India

The B2C e-invoicing will be on a pilot basis. The e-invoices will be issued through a portal. Foreign tourists when they buy goods and take it out, it's exports, so the custom authorities will be able to verify through e-invoicing if if it's eligible for refunds.

There was complete unanimity on exemption of R&D fund to universities, says FM Nirmala Sitharaman. "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. They are exempted from paying the GST," says Union Finance Minister Nirmala Sitharaman.

Any fund even coming from private, for private universities as well established by centre, state law, will be exempt from GST, says FM Nirmala Sitharaman

If the cess has to be collected after March 2026, it cannot be called Compensation cess. So the GoM will decide on purpose of the cess, etc. for after March 2026.

Compensation cess when it was extended only to pay back GST loans. the payment gets cleared by or before March 2026, there can be no collection of cess for Compensation purposes. The decision on cess will be taken before March 2026.

The Council discussed if medical insurance should be introduced only for senior citizens, and will it make implementation difficult

Section 11A to address retrospective tax demands will be used in rarest of rare occasions. Circulars regarding it not discussed at this point of time, says Revenue Secretary

After the GST Council meeting, Union Finance Minister Nirmala Sitharaman says, "GST rates on cancer drugs are also being brought down. It's being reduced from 12% to 5% in order to further reduce the cost of cancer treatment. 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%. On metal scrap, reverse charge mechanism on supply of metal scrap from unregistered persons to unregistered persons provided that the supplier shall take registration as and when it crosses the threshold limit. In addition, a recipient who is liable to pay under the RCM shall pay tax even if the supplier is under threshold."

GST Council reduces rate on cancer drugs to 5% from 12%; on namkeen to 12% from 18%, says Finance Minister Nirmala Sitharaman

Import of services by related party transactions by airlines will be exempt

Council clarified GST will be at 5% on helicopter services on sharing basis, says Revenue secretary

Council approved to introduce B2C e-invoicing to facilitate consumers on voluntary basis in selective states. Necessary amendments will be made

Renting of commercials properties brought under reverse charge mechanism, says Revenue Secretary Sanay Malhotra

GST Council Meeting LIVE:GST on selects snacks reduced from 18% to 12%

Funds given for research to universities established by the law of Centre, state governments, and those who have obtained income tax exemption, are exempt from GST

Nirmala Sitharaman said,"  A committee of secretaries will be formed to explain on how to take IGST forward. Today we have negative balance on IGST. The committee will be formed under additional secretary in revenue. There is excess IGST given to states will have to be retrieved. The modus operandi of IGST may be explained to states if needed. The committee will have officials from states and centre."

Council discussed Compensation cess. Projected surplus from cess after repayment of loans is at Rs 40,000.

A GoM will be formed on how to go forward on Compensation cess.

Compensation cess can be collected till March 2026 to repay back to back loans and service interest on it. By Jan 2026 we will be able to clear the loans, says FM Nirmala Sitharaman

Status on online gaming, casinos was submitted. Revenue from online gaming increased 412% at 6909 cr over 6 months

For casinos revenue increased 30% to Rs 214 crore over six months. The comparison is 6 months prior to Oct 2023 and six months later

New members added to GoM on rate rationalisation for limited prupose of medical insurance. This report will be submitted by Oct-end. Council in its meeting in Nov will discuss medical insurance

GoM to discuss insurance related matters for Senior citizens, life insurance, term insurance, group insurance

GoM on rate rationalisation to hold meet on Sep 23, says FM Nirmala Sitharaman

Two status reports on GoM on rate rationalisation and real estate were presented, said FM Nirmala Sitharaman.

After the GST Council meeting, Punjab Finance Minister Harpal Singh Cheema said, "Many issues were raised like the issue of iron steel that 18% GST is being levied on it, but our point was not accepted and it was kept pending, it will be discussed in the upcoming meeting. Our demand is that the GST on iron steel should be made 5%."

R&D grants to educational institutions exempt from GST, says Punjab FM

After the GST Council meeting, West Bengal Finance Minister Chandrima Bhattacharya said, " The issue of GST on health insurance was raised by me. I said that the full exemption should be given. The Chief Minister of Goa supported me. Many of the ministers were of the view that it has to be reduced. They were agreeable to reduce but from 18% to 5%. Now, whether it will be exempted or it will be reduced to 5%, GoM has been constituted, which will give its report by October last and then it will be decided in the next meeting."

CNBC TV18 reports that Punjab, West Bengal, and Kerala have suggested a review of the GST compensation cess

The issue of taxation of insurance premiums figured in Parliament discussions with Opposition members demanding that health and life insurance premiums be exempt from the GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue.

GST Council meeting is over

The GST Presser is expected to start at around 06.15 and 06.30 pm due to ongoing discussions.

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

According to CNBC-TV18, the GST Council has decided to maintain the existing rules for online gaming, casinos, and racecourses.

According to sources cited by CNBC-TV18, the proposal to clarify taxation related to oil and gas exploration under farm-in and farm-out contracts has been postponed. The issue will undergo further review in the next meeting, with a more thorough examination by the fitment committee.

Broad consensus in GST Council meeting for rate on life and health insurance to be reduced, but modalities to be decided in next council meeting, say sources

• Uttarakhand Finance Minister Premchand Aggarwal clarified that no decision was made in the 54th GST Council Meeting regarding taxation on small digital transactions.
• The proposal to impose 18% GST on payment aggregators for transactions below Rs 2,000 has been referred to the fitment committee for further review.
• GST on helicopter services for pilgrims and tourists will be reduced from 18% to 5%.
• The issue of GST on research and development activities in educational institutions will also be reviewed by the fitment committee.
• Notices were issued by the Directorate General of GST Intelligence (DGGI) to seven universities, including IIT Delhi and Punjab University, over research grants worth Rs 220 crore.

Shares of Star Health, ICICI Lombard General Insurance and Go Digit General Insurance trading in red on the back of GST council's impending decision on insurance premium.

GST briefing timing is expected to be around 5 tentatively.

GST Council still deliberating on life insurance, health insurance, says Uttarakhand FM Premchand Aggarwal

GST on helicopter services for religious purposes has been reduced to 5% from 18%

GST on online transactions below Rs 2000 issue will be sent to fitment committee for further deliberations

R&D to educational institutions has been made exempt from GST, says Uttarakhand FM

According to CNBC-TV18, the proposal to enable GST data sharing, which was previously rejected, is now being reconsidered with enhanced security measures. If approved, it could pose a risk to businesses due to the possibility of confidential data leaks.

The recent council meeting offered relief to taxpayers who received demand notices under Section 16(4) between 2017 and 2021. The notification is expected to be issued after September 9.

The group of ministers, headed by Bihar Deputy Chief Minister Samrat Chaudhary, is working on consolidating the existing GST slabs of 5, 12, 18, and 28 percent into three tax rates. Finance Minister Nirmala Sitharaman mentioned that while the GST Council will discuss the rationalization of tax rates, a final decision on adjusting taxes and slabs will be made at a later stage. (Read More)

Net GST revenue stood at Rs 1.5 lakh crore, reflecting a 6.5 percent increase compared to the previous year. The total refunds amounted to Rs 24,460 crore, with 58 percent being domestic refunds and the remaining allocated to exporter refunds.

Net domestic revenues, after adjusting for refunds, increased by only 4.9 percent, reaching Rs 1.11 lakh crore, while IGST revenues saw an 11.2 percent rise. In the previous month, net domestic revenues had grown by 14.4 percent, amounting to Rs 1.66 lakh crore.

For the first five months of the year, collections increased by 10.1 percent, reaching Rs 9.14 lakh crore. Domestic revenue rose by 9.2 percent to Rs 1.25 lakh crore, while import revenue grew more rapidly at 12.1 percent, totaling Rs 49,976 crore compared to the same period last year.

GST Council's official website - gstcouncil.gov.in - is not working right now. Several people have taken to X to complain about the site crash.

India's Goods and Services Tax (GST) collections in August stood slightly lower at Rs 1.75 lakh crore, compared to Rs 1.82 lakh crore in the previous month, as per data released on September 1. Despite this dip, GST growth remained steady at around 10 percent, with the country having recorded Rs 1.59 lakh crore in revenue during August 2023.

The GST Council plans to address the taxation of highway builders under the toll-operate-transfer (T-O-T) model. If clarified, an 18% GST could be applied, affecting highway projects and potentially resolving pending notices totaling Rs 670 crore from the Directorate General of Goods and Services Tax Intelligence (DGGI).

A PTI report says that the GST Council will deliberate on the status of taxation on the online gaming sector. However, any change in tax rates is unlikely, the PTI report added.

• It all started with Union Minister Nitin Gadkari’s letter to Union Finance Minister Nirmala Sitharaman seeking exemption on GST on health insurance premium getting leaked. This was July 31st.
• After this, a huge controversy erupted. This issue reached Parliament as well. There, Sitharaman said that 75 percent of the GST collected goes to the states.
• So, in case, there is a demand for doing away with the GST on insurance premium, there should be some communication from the state governments.
• Later, we saw West Bengal said that it had raised the issue. West Bengal finance minister Chandrima Bhattacharya raised the issue in the GoM of rate rationalisation.

GST Council Meeting LIVE: 'We will oppose GST on research grants,' says Delhi minister Atishi

The Council will review the current crackdown on fake GST registrations, which began on August 16 to detect and eliminate fraudulent GSTINs. So far, previous audits have revealed suspected tax evasion totaling Rs 24,010 crore. The Council will assess the progress of this initiative and the actions taken against offenders.

The push to reduce health insurance premiums comes in response to appeals from both opposition leaders and BJP members, including Union Transport Minister Nitin Gadkari, who are advocating for exemptions on these premiums.

The meeting of GST Council headed by Union Finance Minister Nirmala Sitharaman has begun. Stay with us as we bring you agenda of the meeting and all the outcome of deliberations.

In FY24, the GST on health insurance premiums generated substantial revenue amounting to Rs 8,262.94 crore, underscoring the significant financial impact of any proposed changes.

According to an ANI report, the GST Council is likely to consider taxing the online payments over Rs 2,000. As of now, there is no mechanism of taxing payments made via online gateways.

While there are changes expected for senior citizens, there may not be any change on group health premium.

There's strong buzz around major relief for senior citizen. Latest reports say that the GST Council may bring down the current 18 percent GST on health premium to nil for senior citizens.

In its June meeting, the Council introduced several taxpayer-friendly measures, including a waiver of interest and penalties on demand notices issued during the first three years of GST—2017-18, 2018-19, and 2019-20—provided the full tax amount is paid by March 31, 2025.

The continuation of the Compensation Cess mechanism has been a contentious topic. Despite multiple extensions of the current arrangement, there is a growing need to phase out the GST compensation mechanism, including the Compensation Cess.

The GST Network recently introduced a special procedure requiring pan masala and gutka manufacturers to register their machines with tax authorities. On May 16, GSTN notified taxpayers that an online facility for these manufacturers to submit machine-related information via Form GST SRM-I is now available on the GST portal.

In previous meetings, the GST Council formed a Group of Ministers to examine capacity-based taxation for commodities like pan masala and gutka, due to concerns over tax evasion. The proposal aims to introduce taxation based on the maximum retail prices of these products and shift the tax burden to the manufacturing stage.

Ongoing discussions have focused on reducing the current four major GST slabs (5%, 12%, 18%, and 28%) to possibly three. While this change could simplify the tax structure and ease compliance burdens, it may also lead to inflationary pressures.

The GST Council must promptly address issues to ensure the Tribunals become fully operational and efficient. Dispute resolution under the GST framework has been delayed due to the slow implementation of the GST Tribunals, preventing aggrieved taxpayers from filing appeals and seeking relief against orders issued by the Commissioner (Appeals).

The recent establishment of GST Appellate Tribunals marks a crucial advancement in streamlining GST dispute resolution. However, the administration and effective implementation of these Tribunals need to be expedited.

The electric vehicle (EV) sector may be disappointed, as the fitment committee is unlikely to recommend a GST exemption on charging services at public stations.

Another topic on the agenda is rate parity between car and two-wheeler seats. The fitment committee is expected to recommend raising the GST on car seats from 18% to 28%, while keeping the GST on two-wheeler seats at 28%.

The Council is also expected to provide clarity for IT giant Infosys. Sources indicate that the upcoming GST Council meeting may include provisions to offer relief to Infosys. Additionally, the Council is likely to address concerns affecting major IT and data hosting companies such as Amazon, Google, and Meta.

The DGGI had issued notices to the online gaming, casino, and horse racing sectors, demanding over Rs 1 lakh crore in past claims. The industry is currently contesting this demand in the Supreme Court against the Centre.

The Council is also scheduled to review changes related to casinos, online gaming, and horse racing, following the 51st GST Council's decision to impose a 28% GST rate starting October 1, 2023.

The fitment committee is anticipated to propose exempting GST on grants and donations received for research purposes. Recently, the DGGI issued show-cause notices to seven educational institutions, demanding Rs 220 crore in unpaid taxes.

The GST Council is also expected to consider providing relief to educational institutions and universities, including IIT Delhi.

The committee is expected to recommend maintaining the 18% GST rate for past periods, with a potential reduction to 12% going forward. This clarification could help resolve ongoing litigation and lower the compliance burden for companies such as ITC, PepsiCo, and Haldiram, which are currently challenging 18% GST demands.

The GST Council is also expected to address concerns in the FMCG sector, specifically related to the taxation of snacks and namkeen. Sources indicate that the Council may recommend aligning the GST rate on snacks produced through extrusion processes with that of other snacks, such as bhujia and namkeen.

The impacted airlines include Emirates (Rs 7,550 crore), Etihad Airways (Rs 1,660 crore), Saudi Arabia Airlines (Rs 612 crore), Oman Airlines (Rs 71 crore), Thai Airways (Rs 60 crore), Qatar Airways (Rs 53 crore), Singapore Airlines (Rs 40 crore), British Airways (Rs 33 crore), and Lufthansa Air Cargo (Rs 10 crore).

The Directorate General of GST Intelligence (DGGI), the primary GST anti-evasion authority, recently issued show-cause notices to 10 foreign airlines, demanding 18% GST on services received by their overseas head offices, amounting to Rs 10,500 crore.

The proposal could also address past demands on an "as-is" basis, offering much-needed relief to the sector.

According to a report by CNBC-TV18, the GST Council's fitment committee is likely to recommend exempting the import of services by a foreign airline's overseas head office when received without consideration.

The GST Council's meeting will revisit the taxation of online gaming, casinos, and horse racing, following its earlier decision to implement a 28% GST rate on these sectors starting October 1, 2023. However, decisions on past demands from 2017-2023, amounting to over Rs 1 lakh crore, may be postponed as the Council awaits further data.

The 54th GST Council meeting, scheduled for September 9 in New Delhi, will tackle a packed agenda covering key issues across various industries. Reports indicate that the Council may consider offering relief to foreign airlines operating in India through their branch offices.

The GST Council's fitment committee is expected to propose exempting the import of services by a foreign airline's head office abroad when received without consideration, potentially regularizing past demands and providing much-needed relief to airlines facing substantial GST claims.