Finance Minister Nirmala Sitharaman, in the latest Goods and Services Tax (GST) council meeting held at the Sushma Swaraj Bhavan in New Delhi, has announced several critical decisions aimed at rationalizing the GST structure. The council reviewed the reports from the Ministerial Groups (GoMs) on rate rationalization and real estate, indicating potential shifts in policy to ease the tax burden on various sectors.
Highlighting major revenue gains, Sitharaman pointed out that the revenue from online gaming has seen a dramatic 412% increase over the last six months, amounting to Rs. 6909 crores. In line with making healthcare more affordable, the GST rate on cancer drugs has been slashed from 12% to 5%. Additionally, the tax on snacks has been reduced from 18% to 12%, reflecting the council's responsive approach to public and industry feedback.
In an educational boost, the Finance Minister declared that recognized universities and research centers would no longer need to pay GST on grants received, fostering a more supportive environment for academic growth and research.
Moreover, two new GoMs have been established, one overseeing medical and health insurance, headed by the Deputy Chief Minister of Bihar, focusing on the GST implications in these sectors. They are expected to deliver a report by the end of October 2024, with the GST Council set to make final decisions based on these findings in November.
Addressing future challenges, Sitharaman announced the formation of a ministerial group to deliberate on compensation cess post-March 2026. This group will explore methods to balance the IGST distribution and address state concerns over revenue sharing.
The 54th GST Council meeting, chaired by Sitharaman and attended by Central and State finance ministers, along with other senior officials, marks a significant step in refining the tax framework, which will likely bolster economic and structural reform in the country. The council continues to strive for a balanced approach that supports both growth and fairness in the tax system, aiming to align it with global standards and contemporary economic realities.
