- New GST Recommendations Announced: On September 3, 2025, India’s Ministry of Finance released new Goods and Services Tax (GST) recommendations approved by the GST Council, which include significant rate changes and exemptions across various sectors.
- Introduction of a Simplified Rate Structure: The current four-tier GST system will be replaced with a simplified structure featuring a standard 18% rate, a 5% merit rate, and a 40% demerit rate for specific goods and services, alongside exemptions for individual life and health insurance policies.
- Rate Reductions on Essential Goods: Effective September 22, 2025, GST rates will be reduced to 5% for coffee, chocolate, certain packaged food items, specified medicines, renewable energy devices, components, and hotel accommodations valued up to INR 7,500 (approximately US$84), aimed at easing compliance and alleviating the financial burden on essential goods and services.
Source GlobalVATcompliance
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