In a significant move, the GST Council, led by Union Finance Minister Nirmala Sitharaman, has decided to establish a Group of Ministers (GoM) to review the Goods and Services Tax (GST) rates on life and health insurance. Bihar Deputy Chief Minister Samrat Choudhary will lead this GoM, which will also include new members focused on health insurance. The GoM is expected to submit its findings by the end of October, with further decisions on insurance GST rates anticipated in the Council’s November meeting.
GST Council Takes Major Decisions on Tax Rates
The GST Council also approved reductions in tax rates for specific items. Effective immediately, the GST on cancer drugs will drop from 12% to 5%, and the tax on namkeens (savory snacks) will decrease from 18% to 12%. These changes are aimed at providing financial relief to consumers and reducing healthcare costs. The reduction in tax rates reflects the Council’s ongoing efforts to make essential goods and services more affordable.
👉 Recommendations during 54th meeting of the GST Council
👉 GST Council recommends Group of Ministers (GoM) on life and health insurance related GST with existing GoM on Rate Rationalisation; to submit report by end of October 2024
👉 GST Council also recommends formation of a… pic.twitter.com/FYX3o4Txgv
— Ministry of Finance (@FinMinIndia) September 9, 2024Compensation Cess and IGST Issues
The Council discussed the upcoming cessation of the compensation cess, which is set to end in March 2026. A new GoM will be formed to address issues related to this cess and explore alternative measures. Additionally, a committee of secretaries will be established, led by the Additional Secretary (Revenue), to address the negative balance currently faced in the Integrated Goods and Services Tax (IGST) account. This committee will work on strategies to recover the funds from states.
Online Gaming Revenue Soars
Sitharaman highlighted that revenue from online gaming has surged by 412% over the past six months, reaching Rs 6,909 crore. The revenue from casinos also saw a 34% increase in the same period. This growth underscores the expanding role of digital entertainment in the economy and the need for ongoing regulatory adjustments in this sector.
Future Implications and Industry Reactions
The GST Council’s recent decisions are expected to have broad implications for various industries, including real estate and IT. According to Pratik Jain, Partner at PwC India, the Council’s actions are significant and will offer relief across multiple sectors. Jain also noted the increasing importance of technological advancements, such as e-invoicing and invoice management systems, which are expected to reshape the GST landscape in the coming months.
#WATCH | Delhi: After the GST Council meeting, Union Finance Minister Nirmala Sitharaman says, "A committee of secretaries also decided today, for the purpose of explaining and also deciding on how to take the IGST (Integrated Goods and Services Tax) forward. A detailed… pic.twitter.com/ePq7DEy4Jz
— ANI (@ANI) September 9, 2024