GST On Cancer Drugs and Namkeen Reduced

Union Finance Minister Nirmala Sitharaman announced on Monday that, following the 54th GST Council meeting, the GST on cancer drugs has been reduced from 12% to 5%. Additionally, the GST rates on namkeens and savoury food items have been prospectively lowered from 18% to 12%.

A Group of Ministers (GoM) has been established to review and recommend a reduction in GST rates for medical health insurance, with a report expected by the end of October.

The GST Council is also planning to form a GoM to evaluate the future of the compensation cess, which is set to expire after March 2026. Sitharaman explained that while the extended compensation CESS, used to repay back-to-back loans and their interest, will be collected until March 2026, it may end earlier if the loans and interest are cleared by January 2026.

The Council decided to create a new GoM for medical and health insurance, led by the Deputy Chief Minister of Bihar with additional members for this purpose. A decision on rate reductions will be made in November based on the GoM’s report.

To lower the cost of cancer treatment, the GST rate on cancer drugs such as Trastuzumab Deruxtecan, Osimertinib, and Durvalumab is being cut to 5%. The rate for namkeens and expanded savoury food items will be reduced to 12%, starting prospectively.

Additionally, the Council recommended exempting GST on research and development services provided by government entities. Funds given to government-affiliated universities and research centres, whether established by central or state laws, or those with income tax exemptions, will not be subject to GST.

Vakilsearch offers comprehensive GST consultation services to help you navigate the latest changes announced by the GST Council, including reduced rates on cancer drugs and savoury food items. Whether you’re a healthcare provider, retailer, or a business dealing with GST compliance, our expert team ensures you stay updated and compliant with evolving tax regulations. With Vakilsearch, you can optimise your GST filings, benefit from lower rates, and ensure smooth compliance with the new policies on compensation cess, medical insurance, and more. Get expert GST guidance today!

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Akash G Varadaraj

Content Writer at Vakilsearch

I'm Akash. G. Varadaraj, an official content writer at Vakilsearch with over four years of experience. I'm here to simplify complex legal concepts into easily accessible articles that even a layman can understand. As a regular contributor to this news portal, I aim to keep you informed in the dynamic world of law, compliance, taxation, and much more. I ensure that you get to know our Vakilsearch expert's take on every piece of news, how it can help, and what you should do.

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