GST Council Announces Revised Slabs Of 5%, 18% And 40% , Cuts Rates On Small Cars, ACs
The 56th meeting of the GST Council was held on 3rd September, 2025. The GST Council inter-alia made the recommendations relating to changes in GST tax rates.The changes in GST rates on services will be implemented with effect from 22nd September 2025.The changes in GST rates of all goods except pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and...
The 56th meeting of the GST Council was held on 3rd September, 2025. The GST Council inter-alia made the recommendations relating to changes in GST tax rates.
- The changes in GST rates on services will be implemented with effect from 22nd September 2025.
- The changes in GST rates of all goods except pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi, will be implemented with effect from 22nd September 2025.
Further, the Goods and Services Tax Appellate Tribunal (GSTAT) will be made operational for accepting appeals before end of September and will commence hearing before end of December this year. The Principal Bench of the GSTAT will also serve as the National Appellate Authority for Advance Ruling.
KEY GST RATE CHANGES OF GOODS AND SERVICES
GOODS
- UHT Milk & Packages Paneer: Reduced To NIL (From 5%)
- Indian Breads: Reduced to NIL (From 5%)
- 33 Life-Saving Drugs: Reduced to NIL (From 12%)
- Dry Fruits: Reduced To 5% (From 12%)
- Butter, Ghee, Cheese: Cut to 5% (From 12%)
- Hair Oil, Toilet Soaps, Bicycles, Kitchenware, Tableware: Reduced to 5% (From 18%/12%)
- Namkeens, Sauces, Pasta, Noodles, Chocolates, Coffee, Cornflakes: Reduced to 5% (From 18%/12%)
- Air conditioners, TVs (>32 inches), Small Cars, Motorcycles (<350cc), Cement, Buses, Trucks, Ambulances, Three-Wheelers: Reduced to 18% (From 28%)
- Pan Masala, Cigarettes, Tobacco, Gutkha, Aerated Drinks, Caffeinated Beverages, Motorcycles (>350cc), Helicopters (personal use): Increased upto 40%
SERVICES
- Health & Life Insurance (Individual Policies): Exempted (From 18%)
- Air Travel (non-economy): Increased to 18% (From 12%)
- Casinos, Online Gaming, Betting, Horse Racing: Increased to 40% (From 28%)
- Hotel stays up to Rs. 7,500/day: Reduced to 5% (no ITC) (From 12%)
- Spa & Beaty Services: Reduced to 5% (no ITC) (From 18%)
- Cinema Tickets (≤ ₹100): Reduced to 5% (From 12%)
- The Council has also recommended amending section 54(6) of the CGST Act, 2017, to provide for sanction of 90% of refund claimed on provisional basis, in cases arising out of inverted duty structure, on similar lines as is presently available for refund in respect of zero-rated supply.
The Council has further recommended amendment to section 54(14) of the CGST Act, 2017 so as to remove the threshold limit for refunds arising out of exports made with payment of tax.