GST Council Delivers Key Updates: New GoMs And Rate Adjustments Announced

On September 9, Union Finance Minister Nirmala Sitharaman chaired the 54th GST Council meeting at Sushma Swaraj Bhawan in New Delhi. Following the meeting, Sitharaman, alongside senior Finance Ministry officials, briefed the media on several significant decisions made by the council.

During the press conference, Sitharaman highlighted the major outcomes of the meeting. The GST Council received status reports from the Group of Ministers (GoM) on rate rationalization and real estate. Notably, the council reviewed online gaming and casino revenue, which has surged by 412% to ₹6,909 crore over the past six months.

Two new GoMs were established during this session. The first GoM will focus on medical and health insurance, with Bihar’s Deputy Chief Minister Samrat Choudhary leading the panel. This GoM is tasked with evaluating the GST rates on health-related services and will present its report by the end of October 2024. The GST Council is expected to finalize decisions based on this report in its November meeting.

The GST Council also announced reductions in several tax rates. The tax on cancer drugs has been cut from 12% to 5%, and the tax on namkeens (snacks) has been lowered from 18% to 12%. Additionally, the council decided to form a GoM to address issues related to compensation cess, which will conclude after March 2026.

Further developments include exempting universities and research centers established by central or state laws or those with income tax exemptions from paying GST on research funds, whether from public or private sources. The council also considered changes to the Integrated Goods and Services Tax (IGST) and a potential rate increase on car seats from 18% to 28%. Other recommendations include clarifying GST rates for roof-mounted air conditioning units for railways and implementing a 5% GST on helicopter passenger transport.

Revenue Secretary Sanjay Malhotra provided additional details, including clarifications on GST for construction services involving preferential location charges and adjustments in the rates for various services.

The GST Council’s latest decisions reflect a continued effort to streamline tax rates and address key issues in the evolving economic landscape.