GST Council September meet: What got cheaper and costlier
The Goods and Services Tax (GST) Council has announced significant reductions in taxes on various goods and services. The move is aimed at making essential items more affordable for the Indian public. The key cuts include a reduction in taxes on certain cancer drugs, helicopter travel, and popular snacks like namkeen. These reductions are a welcome change for many Indians facing rising inflation.
Cancer drugs, helicopter rides now more affordable
The GST Council has reduced the tax on select cancer medications to 5%, making these life-saving treatments more accessible. The tax on shared helicopter rides has also been lowered to 5%. This decision is expected to benefit travelers visiting popular pilgrimage destinations like Kedarnath-Badrinath and Vaishno Devi. However, chartered helicopter services will continue to attract the higher 18% GST rate.
GST on namkeen, research activities reduced
The tax on fried snacks (namkeen) has been cut from 18% to 12%. Additionally, the Council has agreed to exempt research and development (R&D) activities funded by private and public sources, including universities, from GST. This decision marks a significant win for educational institutions engaged in R&D under central or state laws.
Decisions deferred on health insurance, compensation cess
The Council has deferred decisions on two key issues: lowering GST on health and life insurance and extending the compensation cess beyond January 2026. These matters have been referred to two ministerial panels for further consideration. The panel on insurance, led by Bihar Deputy Chief Minister Samrat Chaudhary, is expected to provide recommendations by the end of October.
GST Council hikes tax on car seats, ACs
The GST Council has clarified that uncooked or unfried snack pellets will attract a 5% tax. Meanwhile, the GST on car and motorcycle seats has been increased from 18% to 28%. Roof-mounted package unit air conditioners used in railways have also been moved into the highest GST slab of 28%. The decision on taxing electric vehicle (EV) charging stations was postponed.
No tax relief for payment aggregators
Payment aggregators who had launched a social media campaign seeking exemptions after receiving tax notices last month, did not receive any relief. Revenue Secretary Sanjay Malhotra confirmed that the exemption currently only applies to banks. As part of its broader agenda, the Council also aligned preferential location charges (PLC) for residential, commercial, and industrial properties with the same GST rate applicable to construction services.
