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| GST Council's 54th Meeting |
The 54th meeting of the GST Council, held on September 9, 2024, in Delhi, brought forward several critical decisions and clarifications aimed at enhancing the effectiveness of the GST system and easing the burden on various sectors. Here are the key outcomes of the meeting:
1. Tax Rate Reductions
- Cancer Drugs: The GST rate on certain life-saving cancer drugs was reduced from 12% to 5%. This move aims to make cancer treatment more affordable and accessible to patients.
- Namkeen (Savory Snacks): The Council reduced the GST rate on namkeen products from 18% to 12%, benefiting small businesses and consumers alike.
2. Educational Institutions & Grants
- GST Exemption on Grants: The Council decided to exempt funds provided to Central or State universities and income-exempted institutions from GST. This includes research grants, easing the financial pressure on educational institutions.
- Affiliation Services: Clarifications were made regarding the 18% GST applicable on affiliation services provided by universities to constituent colleges, removing ambiguities surrounding tax applicability.
3. Health and Insurance Sector
- Health Insurance: The Council reached a broad consensus to reduce GST on health insurance premiums from the current 18%, with a final decision expected in the next meeting. This was a significant issue raised by states like West Bengal, and a Group of Ministers (GoM) has been tasked with examining the matter further.
4. Commercial Real Estate and Goods Transportation
- Reverse Charge Mechanism: The renting of commercial properties by unregistered persons to registered entities will now be under the Reverse Charge Mechanism (RCM). This aims to prevent revenue leakage in the real estate sector.
- Goods Transportation: The Council clarified that ancillary services provided by Goods Transport Agencies (GTAs) in the course of transporting goods would be treated as part of a composite supply. This simplifies the tax structure for the logistics sector.
5. Online Gaming and Casinos
- Revenue Surge: The meeting highlighted a 412% surge in revenue from online gaming and casinos, amounting to ₹6,909 crores in six months. This underscores the growing impact of these sectors on the GST framework.
6. Future Actions
- Compensation Cess: A GoM will meet on September 23, 2024, to discuss compensation cess and rate rationalization further. Their findings will shape future GST adjustments.
Data Visualization: GST Rate Changes on Key Sectors
Here are two charts depicting the major GST rate changes from the 54th meeting:
1. GST Rate Reduction on Cancer Drugs & Namkeen
- Previous GST Rate:
- Cancer Drugs: 12%
- Namkeen: 18%
- New GST Rate:
- Cancer Drugs: 5%
- Namkeen: 12%
2. Online Gaming and Casino Revenue Surge
- Previous Revenue (Before 6 Months): ₹1,352 crores
- Current Revenue: ₹6,909 crores (412% increase)
These decisions reflect the Council's balanced approach to making necessary tax adjustments while ensuring that the GST framework remains robust and effective.
Conclusion
The 54th GST Council meeting delivered substantial reforms that will affect several sectors positively. With ongoing discussions on rate rationalization and health insurance, further decisions are expected in the upcoming meetings.
For businesses and consumers, these changes indicate a step towards reducing financial burdens and clarifying tax obligations.
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