The 56th meeting of the GST Council was held on 3rd September 2025 in New Delhi under the chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman. The Council announced several important changes impacting GST rates, trade facilitation, and dispute resolution mechanisms.
1. GST Rate Changes
- Goods: Wide-ranging reductions were announced, especially on essential items such as milk, cheese, paneer, nuts, fruits, sugar, medicines, footwear, and renewable energy devices. Many items previously taxed at 12–18% have been reduced to 5% or Nil.
- Services: Clarifications issued on restaurant services and valuation of lottery tickets.
- Tobacco & Pan Masala Products: These will continue to attract higher rates and compensation cess until cess-related obligations are discharged.
- Luxury & Sin Goods: GST rates on pan masala, gutkha, carbonated beverages, luxury cars, motorcycles (above 350cc), yachts, aircraft for personal use, etc. increased to 40% in some cases.
Implementation Dates:
- Changes in services – from 22nd September 2025
- Goods (other than tobacco/pan masala products) – from 22nd September 2025
- Tobacco & pan masala products – revised rates to be implemented later, after cess obligations are met.
2. Trade Facilitation Measures
- The Council has recommended several process reforms in GST law and procedures (to be notified separately).
- Refunds under Inverted Duty Structure: A new risk-based provisional refund system (90% refund) will be rolled out similar to the mechanism for zero-rated supplies.
3. GST Appellate Tribunal (GSTAT)
- The GSTAT will become operational by September 2025 for accepting appeals and will commence hearings by December 2025.
- A special deadline of 30th June 2026 has been set for filing backlog appeals.
- The Principal Bench will also function as the National Appellate Authority for Advance Ruling, ensuring uniformity and reducing litigation.
4. Key Takeaway
This Council meeting has brought major relief for the common man through reduced GST rates on essential items, while also tightening taxes on luxury and sin goods. Businesses can also expect a smoother dispute resolution process and faster refunds, improving overall compliance and ease of doing business.
| S. No. | Chapter / Heading / Sub-heading / Tariff | Description | From | To |
|---|---|---|---|---|
| 1 | 0405 | Butter and other fats (i.e. ghee, butter oil, etc.) and oils derived from milk; dairy spreads | 12% | 5% |
| 2 | 0406 | Cheese | 12% | 5% |
| 3 | 1806 | Chocolates and other food preparations containing cocoa | 18% | 5% |
| 4 | 1905 | Pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products (other than bread, pizza bread, khakhra, chapathi, roti) | 18% | 5% |
| 5 | 1905 | Pizza bread | 5% | NIL |
| 6 | 2009 89 90 | Tender coconut water, pre-packaged and labelled | 12% | 5% |
| 7 | 2106 | Paratha, parotta and other Indian breads by any name called | 18% | NIL |
| 8 | 2106 90 91 | Diabetic foods | 12% | 5% |
| 9 | 2201 | Drinking water packed in 20 litre bottles | 12% | 5% |
| 10 | 2515 12 10 | Marble and travertine blocks | 12% | 5% |
| 11 | 2516 | Granite blocks | 12% | 5% |
| 12 | 2523 | Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers | 28% | 18% |
| 13 | 2701 | Coal; briquettes, ovoids and similar solid fuels manufactured from coal | 5% | 18% |
| 14 | 8415 | Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated | 28% | 18% |
| 15 | 8419 12 | Solar water heater and system | 12% | 5% |
| 16 | 8507 | Electric accumulators, including separators therefor, whether or not rectangular (including square) other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks | 28% | 18% |
| 17 | 8528 | Television sets (including LCD and LED television); Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receiver or sound or video recording or reproducing apparatus, set top box for television and Television set (including LCD and LED television) | 28% | 18% |
| 18 | 8701 | Tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc) | 12% | 5% |
| 19 | 8702 | Motor vehicles for the transport of ten or more persons, including the driver [other than buses for use in public transport, which exclusively run on Bio-fuels which is already at 18%] | 28% | 18% |
| 20 | 8703 | Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars, other than those mentioned at Sr. Nos. 313, 314, 315, 316,317 and 319 of above table [wherein 28% to 18% is mentioned ] | 28% | 40% |
| 21 | 8703 | Petrol, Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm | 28% | 18% |
| 22 | 8703 | Diesel driven motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm. | 28% | 18% |
| 23 | 8703 | Three wheeled vehicles | 28% | 18% |
| 24 | 8704 | Motor vehicles for the transport of goods [other than Refrigerated motor vehicles which is already at 18%] | 28% | 18% |
| 25 | 8706 | Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705 | 28% | 18% |
| 26 | 8711 | Motorcycles of engine capacity (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars, of an engine capacity not exceeding 350cc; side cars | 28% | 18% |
| 27 | 8711 | Motor cycles of engine capacity exceeding 350 cc | 28% | 40% |
| 28 | 9963 | Supply of “hotel accommodation” having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent | 12% With ITC | 5% Without ITC |
| 29 | 9965 | (i) Supply of Transport of goods by GTA | 5% without ITC (RCM/FCM) 12% with ITC |
5% without ITC (RCM/FCM) 18% with ITC |
| (ii) Supply of transport of goods in containers by rail by any person other than Indian Railways | 12% with ITC | 5% without ITC 18% with ITC |
||
| 30 | 9971 | (i) All individual health insurance, along with reinsurance thereof | 18% with ITC | Exemption |
| (ii) All individual life insurance, along with reinsurance thereof | 18% with ITC | Exemption | ||
| 31 | 9988 | (i) Supply of services by way of job work in relation to umbrella | 12% with ITC | 5% with ITC |
| (ii) Supply of job work services or any treatment or process in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5% | 12% with ITC | 5% with ITC | ||
| (iii) Supply of job work in relation to bricks which attract GST at the rate of 5% | 12% with ITC | 5% with ITC | ||
| (iv) Supply of job-work services in relation goods falling under Chapter 30 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) (pharmaceutical products) | 12% with ITC | 5% with ITC | ||
| (v) Supply of job-work services in relation to Hides, skins and leather falling under Chapter 41 in the First Schedule to the Customs Tariff Act, 1975 | 12% with ITC | 5% with ITC | ||
| (vi) Supply of job-work not elsewhere covered (residual entry) | 12% with ITC | 18% with ITC |
For detailed updates and the complete list of recommendations, you may download the GST Council Press Release dated 03/09/2025 from below link :