Yashaswani Chauhan, Pune
The 54th GST Council presided over by Union Finance Minister Smt. Nirmala Sitharaman reduced the GST on certain cancer-treating medicines from 12% to 5%. The decision forms part of several measures that have been adopted to support sectors while trying to put pressure on others to accelerate the collection of revenues.
On Monday, the GST Council discussed issues such as tax slabs on essential commodities and the revenue that has to be collected from highly proliferating segments like online betting. To prop up the consumer durables segment, the council has also agreed to reduce the GST on namkeens from 18% to 12%, though it provides some respite to the everyday food segment.
It is a positive sign for the entire healthcare sector as rates of many cancer drugs have been slashed under GST but the long-awaited reduction in GST rates of medical and health insurance has not been announced yet. The Group of Ministers (GoM) which was formed to look into the issue was to be headed by Bihar Deputy Chief Minister, Samrat Choudhary and was supposed to give its report by the end of October. Choudhary, who currently chairs the GoM on GST rate rationalization, will head this newly enlarged panel with additional members to address only the health insurance sector.
The GST Council is likely to convene a meeting in November via which a final call on this will be taken depending on the GoM’s report.
Another point that emerged during the discussion was the increase in revenues from online gambling. According to Finance Minister Smt. Nirmala Sitharaman, the sector has made a whopping 412% jump in revenue collections over the last six months with total collections netting Rs 6,909 crore. The industry has now become a major earner in the government’s consolidated fund, after the inception of a 28% goods and services tax on online games in October 2023. The same can also be seen through the casino industry which experienced a 34% increase in revenues during the same period.
Further, the council relieved foreign airlines by exempting GST on the import of services. This exemption will probably help eliminate tax-related problems that foreign airlines have faced in India.
Besides, the committee of secretaries headed by an additional secretary of revenue will be constituted to monitor the current deficit in the IGST and suggest ways out of it. This will require the secretaries’ panel to begin working on collecting some amount from the states to overcome the problem of negative IGST balance.