56th GST Council Meeting Update
Dear Learned Professionals/ colleagues,
Various reforms have been proposed in GST law benefiting public at large in the form of reduction in GST rates on essential goods/ services.
The Gist of changes proposed in rates are as given below: (Applicable w.e.f. 22nd September 2025)
Tax rate slabs of 12% and 28% have been removed completely
Revised GST slab rates are – 5% (Concessional rate), 18% (Standard rate) and 40% (De-merit rate)
Sector-wise changes in GST rates:
Insurance: GST exempted on all individual life & health insurance policies including senior citizen and family floater policies
Essential Goods: Reduced to 0%/ 5% on UHT milk, paneer, all Indian breads, butter, ghee, chocolates, noodles, sauces, namkeens, cornflakes, pasta, etc.
Daily Use Items: Reduced to 5% on hair oil, soaps, shampoos, toothbrush, toothpaste, bicycles, tableware, kitchenware, etc.
Electronics: Reduced to 18% from 28% on Air Conditioners, TV exceeding 32 inches, Dishwashers
Stationary: GST exempted on erasers, pencil sharpeners, notebooks including graph books etc, maps and other charts, etc. Rate reduced to 5% on mathematical, geometry and colour boxes
Pharmaceutical: Reduced to 0% on various lifesaving and cancer related drugs and to 5% on other medicines currently taxable at 12%
Medical devices: Reduced to 5% from 12%/ 18% currently
Automobiles: Reduced to 18% on small cars, 2-wheelers below 350cc, 3-wheelers, buses, trucks, ambulances. Other cars and 2 wheelers would be taxable at 40% rate without any cess thereon.
Also, all spare parts would be taxable now at standard rate of 18%.
Cement: 28% to 18%
Services: Reduced to 5% from 18% on Gyms, salons, yoga, wellness, etc.
Renewable devices: Reduced to 5% from 12%
Garments/ Clothing and Footwear: Where value is ≤ 2,500 per piece, GST rate reduced to 5% and where value is > 2,500 per piece then GST rate increased to 18%.
Transportation sector: Rate increased from 12% to 18% for air transport of passengers (other than economy class), passenger transport by any motor vehicle where cost of fuel included, transportation of natural gas, petroleum etc., GTA services, renting of motor vehicles, etc.
Job-work: Decreased to 5% with ITC from 12% with ITC for job-works on manufacturing of specified items such as umbrella, bricks, pharmaceuticals products, etc. All other job-work now taxable at 18% with ITC.
Changes in GST rates have been proposed in many other sectors also such as leather, wood, defence, handicrafts, etc. For detailed list of annexure click on given link-
Regards
CA Jai Prakash
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