Highlights of 56th GST Council Meeting – September 2025

Karwa & Associates September 3, 2025 GST 0

1. Relief on Daily Essentials

GST reduced on hair oil, shampoo, toothpaste, toilet soap bar, toothbrushes, shaving cream from 18% to 5%.
Butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujia, mixtures, utensils, feeding bottles, napkins for babies, clinical diapers, sewing machines & parts reduced from 12% to 5%.
Corrective spectacles reduced from 12% to 5%.

Maps, charts, globes, pencils, sharpeners, crayons, pastels reduced from 12% to Nil.
Exercise books & notebooks reduced from 12% to Nil.
Erasers reduced from 5% to Nil.

Tractor tyres & parts reduced from 18% to 5%.
Tractors reduced from 12% to 5%.
Bio-pesticides, micro-nutrients, drip irrigation systems, sprinklers, and agricultural/forestry machinery for soil preparation, cultivation, harvesting & threshing reduced from 12% to 5%.

Petrol & petrol hybrid, LPG, CNG cars (≤1200 cc & ≤4000 mm) reduced from 28% to 18%.
Diesel & diesel hybrid cars (≤1500 cc & ≤4000 mm) reduced from 28% to 18%.
Three-wheeled vehicles reduced from 28% to 18%.
Motorcycles (≤350 cc) reduced from 28% to 18%.
Goods transport vehicles reduced from 28% to 18%.
Uniform GST of 18% on all auto parts.
Motorcycles exceeding 350 cc, yachts, mid-sized cars, and aircraft for personal use to attract 40% GST.

Hotel rooms up to Rs 7,500/day reduced from 12% to 5%.
Job work in pharmaceuticals, textiles, printing, umbrella and related sectors reduced to 5%.
Beauty & wellness services reduced from 18% to 5%.

Registration: Automatic registration within 3 working days based on system-driven data analysis.
Refunds:
- Risk-based provisional refunds up to 90% for exporters and inverted duty cases.
- Refunds allowed even on low-value courier exports.
- GST Refunds for Low-Value Export Consignments: The minimum limit of Rs 1,000 for refund claims on goods exported with payment of tax has been removed. This will allow sanction of refund claims below Rs 1,000 through the Customs system. The move will ease working capital constraints, promote low-value exports, and support MSMEs engaged in international trade.
Effective from 1st November 2025.

Significant reduction in GST on essential goods, healthcare, education, and services.
Relief for households, farmers, MSMEs, and small entrepreneurs.
Rationalisation of slab rates with only two primary slabs: 5% and 18%.
Revenue shortfall estimated at Rs 93,000 crore due to rate cuts, partially offset by Rs 45,000 crore expected from the 40% slab on luxury and demerit goods.
Measures aimed at boosting consumption, easing compliance, supporting exporters, and strengthening dispute resolution.

Valuation & Compliance Changes
- GST to be levied on Retail Sale Price (RSP) instead of transaction value for pan masala, gutkha, cigarettes, chewing tobacco, unmanufactured tobacco.
- Clarification added that stand-alone restaurants cannot declare themselves as “specified premises” to avail 18% rate with ITC.
Phased Implementation
- GST rate changes effective from 22nd Sept 2025, except for pan masala, gutkha, cigarettes, unmanufactured tobacco, and bidi which will continue at current rates until compensation cess obligations are cleared.
Exemptions / Special Decisions
- Ad hoc IGST & compensation cess exemption on a new armoured sedan car imported by the President’s Secretariat for the President of India.
GST Appellate Tribunal (GSTAT)
- Principal Bench will also act as National Appellate Authority for Advance Ruling.
- Expected to strengthen uniformity in rulings and taxpayer certainty.

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Contact : anshul@karwaandassociates.com || +91 7568160006