GST Council's Rate Cuts Get Thumbs Up from Industry Leaders

The GST Council's 54th meeting introduced key rate cuts and exemptions across sectors, notably benefiting airlines, the food industry, and healthcare. Industry leaders lauded these moves aimed at reducing tax burdens and clarifying tax treatments.

Industry leaders have applauded the GST Council's recent decision to implement rate cuts and policy adjustments across various sectors. During its 54th meeting on Monday, the Council announced significant changes that were met with a positive response.

One of the key decisions was to exempt GST on the import of services by foreign airlines operating in India through branch offices. The move is seen as a major relief for the airline industry, which had faced a tax demand of Rs 39,000 crore from the Directorate General of GST Intelligence (DGGI). Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co., highlighted that past period issues would also be regularized, resolving recent show-cause notices issued to foreign airlines.

The food industry also received a boost with the reduction of the GST rate on namkeen products from 18 per cent to 12 per cent. Harpreet Singh, Partner at Deloitte India, explained that the amendment has clarified the tax treatment, putting to rest any ambiguity regarding applicable rates.

The Council went on to reduce the GST on critical cancer drugs from 12 per cent to 5 per cent and introduced exemptions on services linked to helicopter-sharing for religious pilgrimages. According to Shivashish Karnani, Head of GST at DPNC Global, these measures aim to reduce the tax burden on consumers.

The Council also announced the formation of a Group of Ministers (GoM) to explore lower GST rates for life and health insurance services, with a report expected by October 2024. In an effort to boost research and development, GST exemptions were granted to government universities and research centres on grants received for research activities. However, discussions on online gaming taxation remain unresolved. (ANI)

(With inputs from agencies.)