GST Council Cuts Tax on Cancer Drugs to 5%, Removes 18% Tax on Electricity Connections
GST Council Reduces Tax on Cancer Drugs and Electricity Connections
In a significant decision, the GST Council has reduced the GST on life-saving cancer drugs from 12% to 5%. This decision was made during the Goods and Services Tax (GST) Council meeting held on Monday. For further relief on health insurance policies, investors will have to wait until November. The council is yet to finalize decisions on providing relief in health insurance premiums.
Relief on Health Insurance Premiums Likely by November
The council has established a Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, to explore ways to provide relief in health insurance premiums. The GoM is expected to submit its report by the end of October, and the council will revisit the issue in its next meeting.
No More 18% GST on Electricity Connections
The GST Council also decided to remove the 18% GST on new electricity connections. This change will make new connections cheaper by approximately Rs 1,000.
Online Gaming Sector Faces Higher Taxes
Despite requests from the online gaming sector to lower taxes, the council did not discuss the matter. Finance Minister Nirmala Sitharaman mentioned that taxes collected from online gaming increased fourfold in the last six months, reaching Rs 6,099 crore.
GST on Helicopter Services for Pilgrims Reduced to 5%
Uttarakhand Finance Minister Prem Chand Agarwal announced a reduction in GST on helicopter services for pilgrims visiting Kedarnath and Badrinath from 18% to 5%. This clarification provides much-needed relief to religious travelers.
Simplification of Real Estate Tax Structure Underway
The council also reviewed two reports from ministerial groups on real estate and tax structure simplification. A key meeting to further streamline the GST tax structure is scheduled for September 23.
Compensation Cess Under Review
The center is set to reevaluate the continuation of the compensation cess, which generates about Rs 95,000 crore annually. This cess is scheduled to end by March 2026. So far, the center has earned Rs 8.66 lakh crore through this levy since the introduction of GST.
Relief for Traders: Old Tax Credit Restored
Traders, who have been awaiting their tax credit for the financial years 2017-18 to 2020-21, received a major relief. The council removed restrictions on the credits, enabling traders to file taxes using old credits after a four-year delay.
Penalty Waiver for Traders
GST Act 128(A) imposed penalties on several traders, but the council decided to waive penalties if the trader’s intention wasn’t to evade taxes. This decision offers significant relief for traders across the country.
