Key Outcomes from the 56th GST Council Meeting

Key Highlights of GST Reforms

• Simplified Tax Structure: GST rates streamlined to just two slabs—18% and 5%—with a 40% demerit rate for select goods.
• Insurance & Healthcare Relief: Full GST exemption on life and health insurance policies; lifesaving drugs and medical devices either exempted or significantly reduced.
• Essential Goods Made Cheaper: Major GST cuts on everyday items like soaps, shampoos, toothpaste, bicycles, paneer, breads, namkeens, chocolates, coffee, and ghee.
• Sectoral Boosts: Lower GST on cement, small vehicles, agricultural machinery, fertilizers, handicrafts, and renewable energy equipment.
• Ease of Doing Business: GST Appellate Tribunal to be operational by December 2025, streamlining dispute resolution.

Procedural & Legal Reforms

• Refund Acceleration: 90% provisional refunds for inverted duty structures and exports, starting 1 November 2025.
• Simplified Registration: Faster GST registration for small and low-risk businesses, plus a new scheme for small e-commerce sellers.
• Export-Friendly Rule Change: Section 13(8)(b) removed—now the place of supply for intermediary services is the recipient’s location, benefiting Indian service exporters.
• Post-Sale Discount Clarity: Credit notes to manage discounts, with mandatory Input Tax Credit (ITC) reversal where applicable.
• Valuation Updates: Retail Sale Price (RSP)-based GST valuation for pan masala, gutkha, and tobacco products.
• Digital Services Taxation: Local delivery services via e-commerce platforms now taxed under Section 9(5) at 18%.

Effective Date: Most changes kick in on 22 September 2025, with some procedural reforms starting 1 November 2025. Tobacco-related changes are treated separately.

Sources

• Tax Real Time
• CMA Knowledge
• efiletax
• MSN

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