GST Council Approves Tax Relief for Airlines, Helicopters, and Cancer Drugs

The Goods and Services Tax (GST) Council has introduced key tax relief measures, focusing on foreign airlines, helicopter services, and cancer drugs. Additionally, the Council has formed a panel to explore potential tax cuts on insurance premiums and discussed the future of the GST compensation cess.

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1- Relief for Foreign Airlines

• The GST Council has exempted foreign airlines from GST on services imported from related entities outside India without payment. This decision addresses the ₹39,000 crore tax demand previously levied on foreign airlines operating in India, providing significant financial relief to the sector.

2- Tax Cuts on Helicopter Services and Cancer Drugs

• The Council has introduced a 5% GST on passenger transport by helicopters on a seat-sharing basis, while past demands have been regularized. Charter services, however, will continue to attract 18% GST. Furthermore, the Council has reduced GST on life-saving cancer drugs such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%, offering crucial financial relief to patients.

3- Exemptions for Research Institutions

• The GST Council has extended tax exemptions to government research institutions, fostering greater investment in research and development. Additionally, tax notices issued to certain entities in the sector will be withdrawn, easing compliance burdens.

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4- Future of GST Compensation Cess

• The Council deliberated on the future of the GST compensation cess for products like automobiles and tobacco, which is set to expire by 2026. Given the revenue needs of both the Centre and states, the continuation of the cess in some form appears likely.

5- Insurance Premium Taxation Review

• A ministerial panel will study the potential reduction of GST on health insurance premiums. The panel is expected to submit its report in November, after which the GST Council will deliberate on the findings.

6- E-Invoicing for Retail

• The Council introduced e-invoicing on a voluntary basis at the retail level to enhance tax transparency and compliance. Currently, e-invoicing applies only to wholesale transactions above a specified threshold.

7- Online Gaming Taxation

• The Council reaffirmed the imposition of 28% GST on online gaming platforms, with a review planned six months after implementation. This taxation applies to entry-level bets, regardless of whether the game is of skill or chance.

Conclusion

The GST Council's decisions represent a balanced approach, providing relief to critical sectors while safeguarding revenue growth. Ongoing discussions about the future of the GST compensation cess and potential tax reductions on insurance premiums will be crucial in shaping India's tax landscape.

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