GST Council Reduces Taxes on Cancer Drugs and Snacks

On 9th September, 2024, the Goods and Services Tax (GST) Council decided to lower taxes on cancer drugs and savory snacks while exempting research funds from GST, following significant debate within the academic community over previous tax notices.

Key Points

Tax Reductions for Cancer Drugs: GST on cancer drugs Trastuzumab Deruxtecan, Osimertinib, and Durvalumab will be reduced from 12% to 5%.
Namkeen Snacks Tax Cut: GST on savory snacks like bhujia and mixture will decrease from 18% to 12%, while un-fried or uncooked snack pellets will remain taxed at 5%.
Research Funds Exempt: Research funds provided to universities and research institutions, whether public or private, will be exempt from GST, addressing concerns over recent tax notices sent to prominent institutions like IIT Delhi and Anna University.
Deferred Health Insurance GST Reduction: The proposed reduction in GST on health insurance premiums has been postponed. A Group of Ministers (GoM), led by Bihar’s Deputy Chief Minister Samrat Choudhary, will review the issue and report by the end of October.
Past Demands Regularized: Past demands for unpaid taxes on research grants will be regularized on an "as is where is" basis, aiming to ensure more funds for R&D activities.
New GoMs and Committees: A new GoM will examine the future of compensation cess post-March 2026, and a committee of secretaries will address the negative balance in integrated GST, exploring ways to recover funds from states.