The 54th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, took place on September 9, 2024, in New Delhi. The council decided to set up a Group of Ministers (GoM) to explore reducing the tax rate on life and health insurance, as well as cutting GST on cancer drugs and namkeens.
Key changes were proposed that could affect what consumers pay for certain goods and services.
One of the key changes proposed was a GST cut on cancer drugs like Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%.
The average cost of the three cancer drugs in India (as of September 10, 2024) is:
Trastuzumab Deruxtecan (Enhertu 100 mg) costs about Rs 22,300 per vial at Apollo Pharmacy
Osimertinib (Tagrisso 80mg strip of 10 tablets) costs Rs 204,000 at Apollo Pharmacy
Durvalumab (500mg) costs Rs 157,000 on IndiaMart
“The proposed reduction of the GST rate on cancer drugs to 5% is a welcomed move by the council that will help alleviate the financial strain of this life-threatening disease”, said Dr Manisha Karmarkar, CEO of DPU Super Specialty Hospital, Pimpri, Pune.
“Cancer remains one of the top five causes of death in India, with many patients struggling to afford the necessary treatment. In 2023, India recorded approximately 1.49 million cancer cases, and estimates suggest a 12.8% rise in annual cases by 2025,” she added.
If the proposals are accepted, here’s what else could ease your wallet or pinch it:
What may be cheaper?
Savoury snacks: Items like namkeens, bhujia, mixtures, and other ready-to-eat snacks may have a reduced GST rate from 18% to 12%. However, snack pellets that are un-fried or un-cooked may still be taxed at 5%. The new 12% rate may only apply going forward.
Exemptions for research services: The supply of research and development services by government entities, universities, or colleges may now be exempt from GST. This exemption covers both government and privately funded projects.
Changes to interest waivers and tax demands proposed: For those facing tax demands under the Central GST Act for the financial years 2017-18, 2018-19, and 2019-20, the council proposed a waiver on interest and penalties. Taxpayers may need to make the necessary payments by March 31, 2025, to benefit from this waiver.
What may be pricier?
Car and motorcycle seats: Car owners may have to shell out more for car seats as the GST rate on them may increase from 18% to 28%, aligning it with motorcycle seat taxes.
Helicopter charters: The council clarified that flying training courses approved by the Directorate General of Civil Aviation (DGCA) may remain GST-free. Meanwhile, passenger transport by helicopters may be taxed at 5%, while helicopter charters may continue to attract an 18% GST.
Renting commercial property and reverse charges: For those renting out commercial properties, if the landlord is unregistered but the tenant is registered, the tenant may now be responsible for paying GST under the Reverse Charge Mechanism. This is to prevent any loss of revenue to the government.
Metal scrap: For businesses dealing in metal scrap, a Reverse Charge Mechanism (RCM) may be introduced. This means the registered buyer may be liable to pay the GST on scrap supplied by unregistered sellers. Additionally, a 2% TDS may apply on business-to-business (B2B) transactions involving metal scrap.
Other proposed changes:
Health Insurance: A Group of Ministers (GoM) has been formed to review the GST rates on life and health insurance services. This group includes representatives from several states, including Bihar, Karnataka, and Gujarat. The GoM is expected to submit a report by October 2024.
Preferential location charges clarified: When buying residential or commercial property, charges paid for preferential locations may now be considered part of the main construction service and taxed accordingly. In simpler terms, the charges for the location will no longer be taxed separately but will be bundled with the main cost of the property. This could result in the entire amount, including the location charges, being taxed at the same GST rate as the construction service itself.
New ledgers and B2C e-invoicing: The GST Council also introduced changes to improve tax reporting and payment systems. A new Invoice Management System (IMS) may allow taxpayers to manage their invoices more effectively, reducing errors in claiming input tax credit. Additionally, a pilot programme for B2C e-invoicing may be launched, which could make it easier for retail customers to verify invoices.
The Council also deliberated on the GoM’s status report on rate rationalisation and online gaming.
First Published: Sep 10 2024 | 5:13 PM IST
