GST Council – Tax Diary

In the 56th GST council meeting held on 3rd September, various rate changes and some facilitation measures have been proposed, some of which are as below (Enclosing the same, for your ready reference) – [Please bear with the Numbering, it is what is supported by the site]:

Changes in Rate-Structure: Existing structure to be replaced by a 2-rate structure with a Standard rate of 18%, Merit Rate of 5% and a special de-merit rate of 40% for certain goods and services.
Changes in Rates of Goods (proposed to be made effective 22nd September 2025):Reductions:
1. Household Items like Hair oil, Toilet soap, Shampoo, Toothpaste, Bicycles and Packaged foods like Namkeens, Sauces, Noodles, Chocolates, Coffee, Butter, Ghee, etc. to be brought down to 5% from 12%/18%.
2. Bread and Diary Products namely, Ultra-High Temperature (UHT) milk, Paneer, Chapati, Paratha, Roti, and Pizza bread to be brought under NIL rate.
3. 33 Life Saving drugs to be brought under NIL rate from 12%, 3 Critical Drugs for Cancer/rare diseases to be brought to NIL. from 5% and all other medicines under 12% to be brought to 5%.
4. Key health devices, Diagnostic kits, Bandages, Thermometers, and Glucometers to be reduced from 18%/12% to 5%.
5. Tractors, machinery, and equipment to be reduced from 12% to 5%.
6. Air conditioners, TVs (up to 32-inch), dishwashers, cement, small cars, motorcycles, buses most of them to be brought under 18%.
7. Handicrafts, Marble Blocks, Granite Blocks and Intermediate Leather goods to be brought under 5% from 12%.
8. Uniform rate of 18% on all Auto-parts irrespective of HSN code.
9. Renewable Energy devices to be brought down from 12% to 5%.
10. Rate enhancements:
  1. Pan Masala, Carbonated Beverages (HSN 2202), Caffeinated Beverages (HSN 2202 99 90), Unmanufactured Tobacco (2401), Cigars, Cheroots (2402), Smoking Pipes (9614) to be increased from 28% to 40%
  2. Motor Cars and other Motor vehicles under HSN 8703 and Motor Cycles of Engine Capacity exceeding 350 cc (HSN 8711), Aircrafts for Personal Use (HSN 8802), to be increased from 28% to 40%.
  3. Coal (2701) to be increased from 5% to 18%
  4. Uncoated paper and Paperboard, of a kind used for writing, printing and other graphic purposes (4802, Corrugated paper and Paperboard (4808) increased from 12% to 18%.
  5. Articles of Apparel and Clothing Accessories of Sale Value exceeding Rs. 2,500 per Piece (HSN 61, 62) increased from 12% to 18%.
  6. Cotton Quilts of sale value exceeding Rs. 2,500 per piece (HSN 9404) to be increased from 12% to 18%.
Changes in Rates of Services (proposed to be made effective 22nd September 2025):
- - 1. 1. Composite supply of works contract provided by a sub-contractor to the main contractor providing services at (i) above to Government – 9954
  - 1. 1. Composite supply of works contract and associated services, in respect of offshore works contract relating to oil and gas exploration and production in offshore area – 9954
  - 1. 1. Supply of Air transport of passengers in other than economy class – 9964
  - 1. 1. Goods Transport Services by Road – 9965 – Forward Charge mechanism and Transport of goods by Rail – 9966
  - 1. 1. Renting of Motor Vehicle with operator designed to carry passengers where cost of fuel is included in the consideration – 9966
  - 1. 1. Renting of Goods carriage with Operator where cost of fuel is included in the consideration – 9966
  - 1. 1. Job-Work Services not elsewhere covered – 9988
    - 1. Rate Enhancement – The following to be increased from 28% to 40%
      1. Admission to casinos, race clubs, any place having casinos or race clubs, or sporting events like the IPL.
      2. Services by a race club for licensing of bookmakers in such club.
      3. Specified Actionable Claims (betting, casinos, gambling, horse racing, lottery, online money gaming) defined as goods
Measures for Facilitation of Trade:
1. Refunds:
  1. Sanction of 90% of the amount claimed as Provisional Refund on the basis of identification and evaluation of risk by the system , starting 1 November 2025 (pertaining to inverted duty structure and zero-rated supply).
  2. Removal of Threshold limit for refunds (Rs. 1,00 under Section 54(14))
2. Registration:
  1. Automated registration within 3 days for small and low-risk applicants with monthly tax liability below ₹2,50,000 w.e.f. 1st November 2025.
  2. Simplified registration for small e-commerce suppliers across states
Changes in Provisions:
1. Place of supply of Intermediary services would be the Location of recipient of services, to help exporters to claim Export Benefits.
2. Post Sale Discount:
  1. Requirement of an agreement before or at the time of supply, to be eliminated (Section 15(3)(b)(i) to be omitted)
  2. Discount can be provided by way of Credit Note after providing for corresponding reversal of ITC.
  3. Circular No.212/6/2024-GST dated 26th June 2024 to be rescinded and new Circular to be issued to remove ambiguity and clarify certain issues in this regard.
Valuation: Retail Sale Price (RSP) based valuation for Pan Masala, Cigarettes, Gutkha, Chewing Tobacco, Zarda, Scented Tobacco and Unmanufactured Tobacco.
GST Appellate Tribunal (GSTAT):
1. Tribunal to be operationalised for accepting appeals before September and to commence hearings before December 2025.
2. 30th June 2026 to be the recommended date of limitation for filing Backlog Appeals.
3. Principal Bench of GSTAT to serve as National Appellate Authority for Advance ruling.

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Recommendations of 56th Meeting of GST Council on 3rd September 2025