GST Council meet: The Goods and Services Tax rates on cancer drugs have been reduced from 12% to 5%, Union Finance Minister Nirmala Sitharaman stated on Monday following the end of the 54th GST Council meeting. Furthermore, the GST rate on namkeens and savoury food items has been decreased from 18% to 12%.

A group of ministers (GoM) has also been formed to recommend rate reductions in medical health insurance. It plans to present its report by the end of October.

Key decisions of the GST Council meeting:

- The GST council is set to convene a GoM to look into and determine the best strategy for dealing with the compensating cess, which is slated to expire after March 2026.

- "We had discussed the compensation cess and it was understood and it is clearly till March 2026 is when we can collect the compensation cess which is the extended compensation cess. The extended compensation cess is being collected to repay the back-to-back loans which were taken and also to service the interest on it."

- "Probably by January 2026 itself, we will be clearing the back-to-back loan and the interest and therefore till March which is about two months of compensation cess, which would be leftover but the compensation cess ends by March 2026."

- The GST Council met and decided to develop a new GoM for medical and health insurance. The council will meet again in November to deliberate on a health insurance rate cut.

- "2 new GoMs (Group of Ministers) have been decided. One is on the medical and health insurance. It will be the rate rationalisation GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose."

- "We have told them that they will look into this matter and come up with a report by the end of October 2024. The GST council which will meet in November will finalize based on this report which will come from the GoM." said.

- With inputs from agencies

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