New Delhi, Sep 9 (IANS): The GST Council, headed by Finance Minister Nirmala Sitharaman, on Monday announced setting up a Group of Ministers (GoM) on slashing the tax rate on life and health insurance, as well as reducing the GST on cancer drugs and 'namkeens' (selected snacks).

The GoM on life and health insurance will be headed by Bihar Deputy Chief Minister Samrat Choudhary, who is currently heading the panel on GST rate rationalisation.

The 54th GST Council meeting reached a “broad consensus” to bring relief to individuals and senior citizens with a decision on the GST applied to health insurance premiums.

The current GST rate on health and life insurance policies stands at 18 per cent.

Meanwhile, the GST Council announced to reduce the GST rate on cancer drugs to 5 per cent from 12 per cent and on namkeens to 12 per cent from 18 per cent.

The members also agreed to form a GoM on compensation cess.

"The GST Council has agreed to form a GoM which will now take it up to study and decide on how to move forward on compensation of cess which will cease after March 2026," said FM Sitharaman.

The total cess collection projected until March 2026 stands at Rs 8.66 lakh crore.

After settling the loan payments, a projected surplus of around Rs 40,000 crore is expected.

Revenue Secretary Sanjay Malhotra said that the GST compensation cess may be discontinued post-debt repayments.

At a press conference after the meeting, Malhotra also said import of services by foreign airline companies will be exempt from GST.

Universities and research centres established by central or state government laws, or those granted income tax exemptions, will now be exempt from paying GST on research funding, said FM Sitharaman.

The GST panel also decided to introduce business-to-customer (B2C) GST invoicing. This new system for GST invoice management will take effect from October 1.

It was also announced to surge GST on car seats from 18 per cent to 28 per cent.