The Monday meeting of the GST Council announced significant tax reductions to make essential goods and services more affordable. These include lowering the GST on cancer drugs to 5%, reducing the levy on fried snacks, and cutting taxes on shared helicopter rides. Additionally, taxes on importing services by branch offices of foreign airlines are now exempt.

The Council also exempted R&D activities from GST and postponed decisions on insurance and compensation cess. FM Sitharaman mentioned that GST on online gaming had a revenue spike of 412% in six months, netting Rs 6,909 crores.

On Monday, the GST Council’s meeting brought some changes to the Indian tax system by announcing significant cuts to make essential services and goods more affordable. Among the key reductions were tax cuts on cancer drugs, helicopter travel, and snacks like Namkeen.

The Council reduced GST on select cancer medications to 5%, cut the levy on fried snacks (namkeen) from 18% to 12%, and lowered the tax on shared helicopter rides to 5%.

Among the most significant decisions, the reduction of GST on life-saving cancer drugs like Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5% received praise as a step towards making these treatments more accessible. 

Industry experts highlighted the importance of this move, which complements the customs duty exemption for cancer drugs announced earlier this year. Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, stated that with the increasing burden of chronic diseases in India, this is a move toward making life-saving drugs accessible and improving health outcomes.

The Council also agreed to exempt research and development (R&D) activities funded by private and public sources, including universities, from GST, marking a win for educational institutions engaged in R&D under central or state laws.

Reducing GST on helicopter travel booked on a ‘seat-share’ basis to 5% will benefit travellers to popular pilgrimage destinations like Kedarnath-Badrinath and Vaishno Devi. However, chartered helicopter services will continue to attract the higher 18% GST.

The GST rate has been reduced prospectively from 18% to 12% for namkeens and savoury items. In addition to these tax reductions, the Council postponed decisions on two key issues: 

Lowering GST on health and life insurance and extending the compensation cess beyond January 2026. These matters were referred to two ministerial panels for further consideration.

The insurance panel, led by Bihar Deputy Chief Minister Samrat Chaudhary, will review the exemption thresholds, treatment of senior citizens, and group insurance sales by resident welfare associations. It is expected to make recommendations by the end of October.

The Council also clarified that uncooked or unfried snack pellets would attract a 5% tax while increasing the GST on car and motorcycle seats from 18% to 28%. Roof-mounted package unit air conditioners used in railways were also moved into the highest GST slab. The decision to tax electric vehicle (EV) charging stations was postponed.

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