GST Council Forms GoM to Reduce Health Insurance Taxes and Cancer Drug Rates

In a significant move during the 54th GST Council meeting, Finance Minister Nirmala Sitharaman announced the formation of a Group of Ministers (GoM) to assess and recommend the reduction of GST on life and health insurance premiums. The GoM, led by Bihar Deputy Chief Minister Samrat Choudhary, will submit its report by October.

The meeting also decided to lower the GST rate on cancer drugs, reducing it from 12% to 5%, and cut the tax rate on namkeens from 18% to 12%. The decision to review insurance taxation came after demands from Parliament members and a letter from Transport Minister Nitin Gadkari advocating for the exemption of health and life insurance premiums from GST.

In her response, Sitharaman stated that 75% of GST collections go to states, urging opposition members to engage with their state finance ministers to bring the proposal to the GST Council.

The council also deliberated on a compensation cess issue that will end in March 2026 and plans to address a negative balance in IGST collections. A committee of secretaries has been tasked with formulating solutions for this issue.

The reduction in GST rates on cancer drugs aligns with the government's efforts to enhance healthcare access and affordability. Experts welcomed the decision, stating that it would alleviate the financial burden on patients requiring prolonged cancer treatments, enhancing access to life-saving medications.

With these measures, the government is striving to address key healthcare challenges, particularly in the domain of affordability and accessibility for life-threatening diseases like cancer.