The GST Council's 54th meeting brought several significant decisions, offering much-needed relief to various industries. These changes were well-received by industry leaders, especially in the airline, food, and healthcare sectors.
One of the most impactful decisions was the exemption of GST on the import of services by foreign airlines operating in India through branch offices. This comes as a major win for the aviation industry, particularly after the Directorate General of GST Intelligence (DGGI) raised tax demands of nearly Rs 39,000 crore on these airlines.
Rajat Bose, a partner at Shardul Amarchand Mangaldas & Co, said, "In a major relief to the airline industry, GST has been exempted on the import of services by foreign airline companies operating in India through branch offices from their head offices or establishments outside the country. This will also address past issues, putting to rest the GST demands raised by the DGGI."
The food industry also saw a positive change with a reduction in the GST rate on namkeen products, which was lowered from 18% to 12%. This amendment removes any ambiguity regarding tax treatment going forward.
Harpreet Singh, a partner at Deloitte India, highlighted, "The issue of classification for puff snacks created through extrusion has been resolved with this amendment. These products will now clearly fall under the 12% GST rate for namkeens, ensuring no further confusion."
Other notable changes include a reduction in GST for critical cancer drugs from 12% to 5% and exemptions on services related to helicopter-sharing for religious pilgrimages.
Shivashish Karnani, Head of GST at DPNC Global, said, "The Council's rate rationalization measures, such as lowering GST on cancer drugs and helicopter-sharing for pilgrimages, will ease the financial burden on consumers."
The Council is also considering lower GST rates for life and health insurance services, with a Group of Ministers (GoM) expected to present its findings by October 2024.
In addition, the Council introduced GST exemptions for government universities and research centres on grants for research activities, supporting India's growing emphasis on becoming a research and development hub. However, discussions on online gaming taxation are still ongoing, with no decisions made during this meeting.
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