New Delhi: Union Finance Minister Nirmala Sitharaman announced a significant reduction in the Goods and Services Tax (GST) on cancer drugs during the 54th GST Council meeting on Monday. The tax rate on these life-saving medications has been lowered from 12% to 5%. This move aims to make cancer treatment more affordable for patients. Included in this reduction are drugs such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab.

Savoury Food Items Also Benefit from GST Cut

In a bid to ease the cost of everyday items, the GST Council has decided to reduce the tax rate on namkeens and extruded savoury food items from 18% to 12%. This adjustment will take effect prospectively, aiming to make these popular snacks more affordable for consumers.

New GoM Formed to Review Medical Health Insurance Rates

A new Group of Ministers (GoM) has been established to explore the possibility of reducing GST rates on medical health insurance. The GoM is expected to deliver its recommendations by the end of October 2024. The GST Council will review these recommendations in its November meeting to decide on potential rate adjustments.

Future of Compensation Cess Examined

The GST Council has also decided to form a GoM to evaluate the future of the compensation cess, which is scheduled to expire after March 2026. Sitharaman explained that the cess is currently used to repay loans and service interest. The council aims to resolve the cess issue by January 2026, with any remaining amount continuing until the March 2026 deadline.

GST Exemption for Government-Affiliated Educational Institutions

In a significant move to support education and research, the GST Council has recommended exempting GST on the supply of research and development services provided by government-affiliated institutions. This exemption applies to universities and research centers established by central or state laws and those with income tax exemptions. These institutions will no longer be required to pay GST on funds received for research from both public and private sources.