Press Release: Recommendations of the 56th Meeting of the GST Council held at New Delhi, (gov.in)
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
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