GST Council likely to exempt IGST on cancer drug import

Representative image

The GST Council at its next meeting on Tuesday is likely to exempt cancer medicine Dinutuximab imported by individuals from tax, decide on the applicability of GST on food or beverages served in multiplexes and come out with a clear definition of utility vehicles for levying a 22 percent cess, sources said.

The Council, chaired by the Union finance minister and comprising state ministers, will also decide on GST exemption for satellite launch services provided by private players.

Besides, the import of medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases for personal use and also by centres of excellence are likely to be exempted from Integrated GST. Currently, such imports attract an IGST of 5 percent or 12 percent. The fitment committee, comprising central and state tax officers, has recommended to the Council to clarify these major issues at the 50th meeting of the Council on July 11.

In addition to the recommendations of the fitment committee, the Council will also consider the GoM report on online gaming, finalise contours for setting up an appellate tribunal, and demand of the industry for reimbursement of full CGST and 50 percent IGST in 11 hill states under the 'scheme for budgetary support'. With regard to rates, the fitment committee has recommended to the Council to define Multi Utility Vehicles (MUV) or multipurpose vehicles or crossover utility vehicles (XUVs) at par with the Sports Utility Vehicles (SUVs) for levy of a 22 percent compensation cess over and above the 28 percent Goods and Services Tax (GST) rate, sources said.

The committee has recommended that all utility vehicles, by whatever name called, would attract 22 percent cess provided they meet three parameters — length greater than 4-metre, engine capacity greater than 1,500 cc, and ground clearance in 'un-laden condition' of more than 170 mm. The GST Council had in December last year clarified on the definition of SUVs. At that time, some states had asked for a similar clarification for MUVs.

The fitment committee has asked the GST Council to clarify that food and beverages served in cinema halls be taxed at 5 percent and not 18 percent as was being done in some multiplexes. Karnataka had raised the issue and demanded clarity from the Council. The food or beverages served in a cinema hall is taxable as restaurant service, the committee said.

However, if the sale of cinema tickets and the supply of eatables such as popcorn or cold drinks etc. are clubbed and sold together, the entire supply should be treated as a composite supply and taxed as per the applicable rate of the principal supply, which in this case is cinema ticket. Currently, movie tickets below Rs 100 are taxed at 12 percent, while those above the threshold attract an 18 percent GST.

Import of cancer medicine Dinutuximab (Qarziba) by individuals for personal use attracts a 12 percent IGST. The fitment committee said that the medicine which costs Rs 36 lakh should be exempted from GST as patients usually raise money through crowdfunding. As regards satellite launch services, public sector enterprises like ISRO, Antrix Corporation Ltd (ACL), and New Space India Ltd (NSIL) are exempt from GST. However, private players are required to pay an 18 percent tax.

As India is emerging as a strong player in the global commercial space market, the fitment committee suggested that exemption should be extended to the private players also with a view to provide a level-playing field.