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Press Release

Date: September 9, 2024
Subject: GST Council Announces Targeted Rate Relief, Service Exemptions, and Compliance Reforms
Description:

The 54th meeting of the GST Council, held in New Delhi under the chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman, approved a series of measures aimed at providing tax relief, clarifying GST treatment across sectors, and improving compliance efficiency. Key decisions included a reduction in GST from 12 percent to 5 percent on select cancer drugs, namely Trastuzumab Deruxtecan, Osimertinib, and Durvalumab, to enhance affordability of critical medicines. The Council recommended exempting GST on research and development services provided by government entities and specified institutions when funded through government or private grants, with past demands to be regularised. It also proposed the constitution of two Groups of Ministers—one to examine GST on life and health insurance in conjunction with rate rationalisation, and another to study the future of the compensation cess. Several clarifications were issued on goods and services, including revised rates for certain food products, classification of air-conditioning units for railways, treatment of metal scrap under reverse charge, and taxability of various service components such as transport by helicopters, affiliation services, and preferential location charges. To facilitate trade and reduce litigation, the Council recommended waivers of interest and penalties for specified past tax periods, simplification of export refund rules, and issuance of clarificatory circulars on input tax credit and place of supply issues. In a forward-looking move, the Council approved a pilot rollout of B2C e-invoicing and enhancements to the GST return system through an Invoice Management System to improve transparency and reconciliation.

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