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New Delhi: At the 54th Goods and Services Tax (GST) Council meeting, several key decisions were taken, which included the reduction of GST on cancer drugs to reduce the medical expenses of common people on its treatment. Another major decision taken in the key meet was reduction of GST on select snacks (namkeen). The rate on namkeen has now been lowered from 18% to 12%.
Apart from these two major announcements, Sitharaman also highlighted several updates from the Group of Ministers (GoM) on rate rationalisation and real estate. The GoM also presented status reports on online gaming and casinos. According to Sitharaman, revenue from online gaming has surged by 412%, reaching Rs 6,909 crore in just six months.
Medical Insurance Premium
The Finance Minister announced the formation of GoM for on GST rate reduction on medical health insurance set up. The GoM will be headed by Bihar's deputy Chief Minister. A report in this regard will be submitted by October end.
"The GST council which will meet in November will finalise based on this report which will come from the GoM," Sitharaman said.
In another major announcement, the GST council decided to exempt the import of services by foreign airline companies.
Big Relief From Government Established Universities
In a major relief for universities and research centres established by the Centre or state government laws, or those granted income tax relief will now be exempt from GST on research funding.
Cess Collection
During the GST Council meeting, it was announced that the total cess collection is projected to reach Rs 8.66 lakh crore by March 2026. After accounting for loan repayments, a surplus of approximately Rs 40,000 crore is expected. Finance Minister Nirmala Sitharaman confirmed that the issue of compensation cess was extensively reviewed. She stated that a Group of Ministers (GoM) will be established to determine the future use of the cess, including whether it should continue beyond March 2026, given it will no longer be referred to as compensation cess.
Rate Rationalisation Update
The Group of Ministers (GoM) presented their progress report on rate rationalisation at the GST Council meeting. Finance Minister Nirmala Sitharaman announced that the GoM will reconvene on September 23 to continue discussions on this topic.
Changes in Commercial Property Rentals
In a move to curb revenue leakage, the GST panel has decided to include the renting of commercial property by unregistered entities under the Reverse Charge Mechanism (RCM). This change aims to ensure that rentals from these transactions are properly taxed.
New GST Invoicing System
Starting October 1, a new Business-to-Customer (B2C) GST invoicing system will be introduced. This system is expected to streamline GST invoice management and enhance transparency.
Increase in GST Rates
The GST Council also decided to raise the GST rate on car seats from 18% to 28%. Additionally, Roof Mounted Package Unit (RMPU) Air Conditioning Machines used in railways will now be classified under HSN 8415 and attract a GST rate of 28%.