The GST Council on Monday announced tax cuts on several items and services, such as cancer drugs and helicopter travel. After the conclusion of the 54th GST council meeting on Monday, Union finance minister Nirmala Sitharaman said that the reduced rates will apply prospectively.
Here's what got cheaper:
Cancer drugs: Rate on cancer drugs namely, Trastuzumab Deruxtecan, Osimertinib and Durvalumab has been reduced from 12 to 5 per cent.
Namkeens and savoury food products: The Goods and Services Tax (GST) rate on namkeen and savoury food products will be reduced from 18 to 12 per cent. The rate of 5 per cent will continue on unfried or uncooked snack pellets. According to a report by Economic Times, industry experts praised the move. "With the increasing burden of chronic diseases in India, this is a move toward making life-saving drugs accessible and improving health outcomes," Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, told ET.
Helicopter travel: The GST Council decided to cut taxes on helicopter services for religious travel to 5 per cent. “Helicopter services for religious purposes like Kedarnath, Badrinath have been reduced to 5 from 18 per cent. There was no clarity on this. After this, there will be clarity," a report by PTI quoted Uttarakhand Finance Minister Prem Chand Agarwal as saying.
Metal scrap: A Reverse Charge Mechanism (RCM) will be introduced on supply of metal scrap by unregistered person to registered person provided that the supplier shall take registration as and when it crosses threshold limit. The recipient, who is liable to pay under RCM, shall pay tax even if the supplier is under threshold. A TDS of 2% will be applicable on supply of metal scrap by a registered person in B-to-B supply.
Car and motorcycle seats: Car seats are classifiable under 9401 and attract a GST rate of 18 per cent at present. The rate on car seats classifiable under 9401 will be increased from 18 to 28 per cent. The uniform rate of 28% will be applicable prospectively for car seats of motor cars to bring parity with seats of motorcycles which already attract a GST rate of 28 percent.
Research funds: The Council exempted research funding for higher educational institutions and research centres from GST. This is applicable for universities and research centres that have been established by the law of the state or central government. The decision was taken after the Directorate General of GST Intelligence recently sent show cause notices to seven prominent academic institutions for unpaid taxes on research grants given since 2017.
The Council also announced several other decisions, including exempting the import of services by foreign airline companies from related entities abroad, provided the transaction is without consideration.
On the cards
The decision on the much-anticipated potential reduction in GST on health insurance premium has been deferred. Sitharaman said that there were detailed discussions on the matter. A Group of Ministers (GoM) headed by Bihar’s Deputy Chief Minister Samrat Choudhary will examine the issue and give its recommendation by the end of October. The GoM on rate rationalisation, which is also headed by Choudhary, will meet on September 23 to finalise the suggestions.
The Council has also tasked another GoM to determine the treatment of collections from the compensation cess after its expiry.
(With inputs from PIB, agencies)
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