In a significant move, the government has reduced the Goods and Services Tax (GST) on three cancer drugs—Tratstuzumab Daruxtecan, Onimartinib, and Durvalumab—from 12% to 5%. This change, effective from October 10, aims to make life-saving treatment more affordable for cancer patients in India. Let’s take a closer look at what this means for patients and healthcare providers, along with other recent GST developments that impact businesses across the country.
GST Relief on Cancer Drugs: A Welcome Move
Cancer treatment in India is often expensive. The reduction of GST on critical medicines is a positive step towards easing the financial burden on patients and their families. Tratstuzumab Daruxtecan, Onimartinib, and Durvalumab are advanced drugs used to treat various types of cancers, including breast and lung cancers. With the GST rate now down to 5%, these drugs are more accessible, providing much-needed relief for patients undergoing costly treatments.
This GST reduction follows the decision taken at the 54th GST Council meeting, reflecting the government’s commitment to improving healthcare affordability. Healthcare advocates have praised this decision as a crucial step in reducing out-of-pocket expenses for patients.
Key Changes to GST: Impact on R&D Institutions
Another important update relates to research institutions. Colleges, research associations, and government undertakings involved in research and development (R&D) activities are now exempt from GST under Section 36 of the Income Tax Act. This exemption applies to organizations conducting R&D with government or private grants and is expected to facilitate more innovation by reducing financial constraints.
New GST Rules Affecting Commercial Properties
From October 10, new GST rules mandate registered tenants of non-registered commercial property owners to pay 18% GST under the reverse charge mechanism (RCM). This change significantly impacts small businesses, especially those registered under the composition scheme, as it limits their ability to claim input tax credits. For these businesses, the 18% GST adds to their working capital requirements, straining liquidity.
Experts have highlighted that this change may increase costs for lessees and add administrative burdens. Small businesses leasing commercial properties from landlords who are not GST registered will need to factor in these additional expenses while planning their budgets.
Tackling Tax Evasion in Scrap Metal Trade
The state commercial taxes department has also addressed tax evasion in the scrap metal trade. To prevent tax theft, a new directive requires both registered and non-registered individuals dealing in the sale and purchase of scrap metal to comply with stricter GST regulations. The objective is to bring transparency to the industry and curb tax avoidance.
GST Fraud Allegations and Public Protests
Issues surrounding GST compliance have made headlines recently. A magisterial court in Ahmedabad remanded four individuals, including journalist Mahesh Langa, for alleged GST fraud involving fake firms and fraudulent input tax credit claims. This case, currently under investigation, underscores the need for stricter measures to curb GST-related fraud.
On a more dramatic note, an iron trader from Meerut, Akshat Jain, launched a 580 km foot march to the office of UP Chief Minister Yogi Adityanath, protesting alleged harassment by GST officials and a bribe demand for releasing a seized vehicle. This protest, captured in a viral video, has drawn attention to the challenges faced by small traders and raised questions about the conduct of GST authorities.
Conclusion: Moving Towards a Balanced GST Regime
The recent changes in GST policies reflect the government’s attempt to strike a balance between ensuring tax compliance and providing relief where needed. The reduction in GST on cancer drugs is a significant relief for patients and a step towards making healthcare more affordable. However, the new GST rules on RCM for commercial property tenants and the strict measures for the scrap metal trade highlight ongoing efforts to tighten compliance and prevent tax evasion.