A direct summary of the press release issued by the GST Council on 3 September 2025, focusing on reforms and rate changes effective from 22 September 2025:
Key Highlights
- Only three GST rates will remain from 22 September 2025: 5%, 18%, and 40%.
- The compensation cess will be withdrawn for most goods and services except specified "sin goods"; for tobacco and similar products, compensation cess continues until all related dues are settled.
Important Details
Effective Dates and Applicability
- New GST rates become applicable from 22 September 2025.
- Time of supply rules will determine the applicable rate for both advance received and actual supply.
- For input tax credit (ITC), goods/services received up to 21 September 2025 will be eligible for ITC under Section 16 of the CGST Act.
- Refunds due to inverted duty structure will continue as per Circular No 135/05/2020-GST.
Rate Changes and Structure
- 12% and 28% GST slabs have been scrapped; only 5%, 18%, and a special 40% slab for luxury and sin goods remain.
- Most daily-use items now fall in 5%, with labour-intensive and agriculture-related products given support.
- The exact rate on every item is listed in a detailed annexure published with the press release.
Special Provisions
- NIL rate of tax will mean the item is not exempt, but the GST rate is NIL (no exemption benefit).
- For items taxable until 21 September 2025 and exempted thereafter, proportionate input credit must be reversed from 22 September onwards.
- Sin goods (tobacco, pan masala, etc.) will transition to new rates only after all compensation cess liabilities are cleared; until then, current rates and cess stay.
Reference
For detailed GST rates on specific items, refer to the full press release and annexures as published by the GST Council
| Proposed Changes in Rate of GST in GST council Meeting | ||
| ITEM | OLD RATE in % | PROPOSED NEW RATE in % |
| DAIRY ESSENTIAL | ||
| Hair Oil, Shampoo, Toothpaste, Toilet Soap bar, Tooth Brushes, Shaving Creams | 18 | 5 |
| Butter, Ghee, Cheese & Dairy Spreads | 12 | 5 |
| Pre-Packaged Nameens, Bhujia & Mixtures | 12 | 5 |
| Utensils | 12 | 5 |
| Feeding Bottles, Napkins & Babies and Clinical Diapers | 12 | 5 |
| Sewing Machines & Parts | 12 | 5 |
| Healthcare Sector | ||
| Individual Health and Life Insurance | 18 | Nil |
| Thermometer | 18 | 5 |
| Medical Grade Oxygen | 12 | 5 |
| All Diagnostic Kits & Reagents | 12 | 5 |
| Glucometer & Test Strips | 12 | 5 |
| Corrective Spectacles | 12 | 5 |
| Affordable Education | ||
| Maps, Charts and Globes | 12 | Nil |
| Pencils, Sharpeners, Crayons and Pastels | 12 | Nil |
| Exercise Books & Notebooks | 12 | Nil |
| Eraser | 5 | Nil |
| Farmer and Agriculture | ||
| Tractor Tyres and Parts | 18 | 5 |
| Tractors | 12 | 5 |
| Specified Bio-Pesticides Micro-Nutrients | 12 | 5 |
| Drip Irrigation System & Sprinklers | 12 | 5 |
| Agricultural, Horticultural or Forestry machines for Soil Preparation, Cultivation, harvesting & Threshing | 12 | 5 |
| Automobiles | ||
| Petrol & Petrol Hybrid, LPG, CNG Cars (Not exceeding 1200 CC & 400 mm) | 28 | 18 |
| Diesel and Diesel Hybrid Cars (Not exceeding 1500 CC and 400 mm) | 28 | 18 |
| 3 wheeled Vehicles | 28 | 18 |
| Motor Cycle (350 & below) | 28 | 18 |
| Motor Vehicles for Transport of goods | 28 | 18 |
| Rest | 40 | |
| Electronic Appliances | ||
| Air Conditioner | 28 | 18 |
| Television (Above 32") including LED and LCD TVs | 28 | 18 |
| Monitors and Projectors | 28 | 18 |
| Dish Washing Machines | 28 | 18 |
| Hotel Industries: Room up to ₹7500/- | — | 5% (No input) |
FOR BHARTIYA VAISHYA GLOBAL FOUNDATION
Sd.
CA BRIJESH KUMAR AGARWAL
CO-INCHARGE INDIRECT TAX, PROFESSIONAL WING,
EMAIL ID: CAAJAYKAGRAWAL@GMAIL.COM
MOB: 9810450047
Link to download in PDF
https://bvgf.in/blog/pdf/68b9664d01183_summaryofthepressreleaseissuedbytheGSTCouncilon3September2025.pdf
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