The 56th GST Council Meeting has introduced significant changes aimed at rate rationalization and trade facilitation. Key decisions include a wide-ranging rationalization of GST rates on goods and services, with reductions on items like packaged food, agricultural machinery, textiles, and consumer durables such as air conditioners and televisions. Conversely, rates have been increased on “sin goods” like pan masala, aerated beverages, and luxury items, including high-end cars and motorcycles. The council also focused on institutional reforms, with plans to make the Goods and Services Tax Appellate Tribunal (GSTAT) operational by September 2025 to handle appeals and clear backlogs.
On the legal front, clarifications were made regarding intermediary services and post-sale discounts, while a new valuation method based on retail sale price (RSP) was introduced for tobacco and similar products. The council also implemented measures to facilitate trade, including a risk-based system for provisional refunds for exports and inverted duty structure (IDS) cases, as well as simplified GST registration for small businesses and e-commerce suppliers. A special ad hoc exemption was also granted for the import of an armored sedan for the President of India. These changes are designed to streamline compliance, address long-standing industry issues, and improve the overall efficiency of the GST framework.
Overview of Rate Changes
- Goods: Rationalisation across food, agriculture, fertilizers, textiles, handicrafts, renewable energy, construction materials, and others.
- Services: Transport rates streamlined, job work rationalised, beauty & wellness moved to concessional rates, entertainment/gaming taxed higher, and life/health insurance proposed for exemption.
Effective Dates
- 22 Sept 2025: Changes for services and most goods.
- Sin goods (tobacco, pan masala, gutkha, bidis) will continue at old rates until compensation cess loan obligations are fully discharged.
Institutional Reform – GSTAT
- GSTAT to be operational for appeals by Sept 2025, hearings by Dec 2025.
- Backlog appeals window open until 30 June 2026.
- Principal Bench to also function as National Appellate Authority for Advance Ruling (NAAAR).
- Aims to strengthen dispute resolution and ensure consistency in rulings.
Specified Premises Clarification
- Stand-alone restaurants cannot classify themselves as “specified premises”.
- Such restaurants cannot opt for 18% with ITC and will remain at 5% without ITC.
Special Exemptions
Ad hoc IGST and compensation cess exemption for import of a new armoured sedan car by the President’s Secretariat for the President of India.
Other Legal Amendments
- Intermediary Services: Omission of Section 13(8)(b); place of supply now location of recipient.
- Post-Sale Discounts: Section 15(3)(b)(i) deleted; To ensure ITC reversal by the recipient, Section 34 should be amended to refer to Section 15(3)(b), where the value of supply is reduced through a GST Credit Note.
- RSP-Based Valuation: Applicable to pan masala, gutkha, cigarettes, chewing tobacco, zarda, etc.
Measures for Trade Facilitation
- Risk-Based Provisional Refunds (Exports): 90% refund sanction based on system-driven risk checks (effective 1 Nov 2025).
- Provisional Refunds for Inverted Duty Structure (IDS): Extended to IDS cases (effective 1 Nov 2025).
- Refunds on Low-Value Export Consignments: Threshold removed to support small exporters.
- Simplified GST Registration for Small/Low-Risk Businesses: Automated within 3 working days for liability ≤ ₹2.5 lakh/month (effective 1 Nov 2025).
- Simplified Registration for ECO Suppliers: Facilitates small sellers on e-commerce platforms, no need for multiple state registrations.
GST 2.0 – Sectoral Impact Analysis
A. Food & Beverages
The food sector saw one of the most extensive rationalizations under GST 2.0. Essential goods like milk, paneer, and roti have been exempted, while luxury consumables such as aerated beverages face steep increases to 40%. This dual approach eases burden on households while discouraging unhealthy consumption.
| Description | Old Rate | New Rate |
| UHT milk, Paneer (packaged), Pizza bread, Roti/Khakhra | 5% | Nil |
| Paratha, Parotta & other Indian breads | 18% | Nil |
| Cheese, Ghee, Dried fruits & nuts, Preserved foods, Fruit juices, Namkeens | 12% | 5% |
| Chocolates, Ice cream, Sugar confectionery, Soups, Broths | 18% | 5% |
| Other non-alcoholic beverages | 18% | 40% |
| Aerated waters, Pan masala, Carbonated beverages | 28% | 40% |
Impact: The sweeping reductions ease household expenditure and help resolve long-standing inverted duty issues in the sector. However, the steep 40% slab for aerated beverages, caffeinated drinks, and pan masala reflects a public health and revenue-driven stance. Businesses may face transition challenges in pricing, labelling, and managing inventories during the switch.
B. Agriculture & Fertilisers
Agriculture machinery, irrigation equipment, and tractors have seen a significant rate cut to 5%, supporting rural mechanisation and farm efficiency. Fertiliser inputs and bio-pesticides are also reduced, addressing cost pressures.
| Description | Old Rate | New Rate |
| Diesel engines ≤15HP, irrigation pumps/sprinklers, harvesters, composting machines, tractors | 12% | 5% |
| Tractor tyres & tubes | 18% | 5% |
| Sulphuric acid, Nitric acid, Ammonia | 18% | 5% |
| Gibberellic acid, bio-pesticides, micronutrients | 12% | 5% |
Impact: Lower GST on tractors, farm machinery, irrigation equipment, and fertiliser inputs is expected to reduce input costs and encourage mechanisation in the agricultural sector. Bio-pesticides and micronutrients moving to 5% also support sustainable farming practices. These measures address a key industry demand and should ease rural inflationary pressures.
C. Textiles & Footwear
Inputs such as synthetic yarns and technical textiles are reduced to 5%, tackling inverted duty structures. Footwear and garments up to ₹2,500 are taxed at 5%, while luxury apparel faces 18%.
| Description | Old Rate | New Rate |
| Synthetic/man-made yarns, fabrics, carpets, embroidery, trimmings | 12% | 5% |
| Apparel & footwear ≤ ₹2,500 | 12% | 5% |
| Apparel > ₹2,500, Footwear > ₹2,500 | 12% | 18% |
Impact: Rate cuts for yarns, technical textiles, and low-value apparel resolve inverted duty structures and provide relief to MSMEs and exporters. However, the hike to 18% for garments above ₹2,500 could hurt consumer demand in the premium retail segment, create classification disputes, and complicate inventory and MRP management for retailers.
D. Healthcare & Pharma
Healthcare goods saw sweeping relief, with 36 life-saving drugs fully exempted and diagnostic kits reduced to 5%. However, exemptions may create ITC blockage, raising concerns over input costs for hospitals and pharmacies.
| Description | Old Rate | New Rate |
| Life-saving drugs (e.g., Agalsidase Beta, Imiglucerase, etc.) | 5% / 12% | Nil |
| Medicines, medicaments, oxygen, hydrogen peroxide | 12% | 5% |
| Thermometers, surgical instruments | 18% | 5% |
Impact: Exempting 36 life-saving drugs and lowering GST on diagnostic kits and medicaments improves affordability and access to healthcare. However, full exemptions mean ITC blockage, which may raise costs for hospitals and distributors. The sector also faces transitional challenges as inventories purchased at higher tax rates will now be sold at lower rates.
E. Automobiles & Mobility
Rate rationalisation addresses classification disputes, lowering GST on most vehicles from 28% to 18%. However, luxury cars and SUVs are placed at 40%, alongside yachts and personal aircraft.
| Description | Old Rate | New Rate |
| Small cars (≤1200cc petrol / ≤1500cc diesel) | 28% | 18% |
| Three-wheelers, motorcycles ≤350cc | 28% | 18% |
| Luxury cars, SUVs, motorcycles >350cc, yachts, aircraft for personal use | 28% | 40% |
| EVs and hydrogen fuel cell vehicles | 12% / 5% | 5% |
Impact: Reducing GST to 18% on most passenger and commercial vehicles addresses classification disputes and lowers overall ownership costs. By contrast, luxury cars, SUVs, and motorcycles above 350cc now fall in the 40% slab, which could suppress demand in the premium segment. Relief for EVs and fuel-cell vehicles reinforces the government’s push for sustainable mobility.
F. Construction & Infrastructure
Cement has been reduced from 28% to 18%, easing cost burdens on housing and infrastructure. Marble, granite, and certain particle boards are cut to 5%. Works contract services for government projects move from 12% to 18%.
| Description | Old Rate | New Rate |
| Cement (Portland, clinkers, etc.) | 28% | 18% |
| Marble, granite blocks, particle boards | 12% | 5% |
| Works contract services (Govt, earthwork, oil & gas) | 12% | 18% |
Impact: Cutting GST on cement and building materials from 28% to 18% is a significant relief for developers, lowering project costs and improving affordability in housing. However, raising GST on works contract services for government projects may escalate infrastructure costs, creating budgetary challenges for the public sector.
G. Energy Sector
Coal has been increased to 18% to discourage dependence on fossil fuels, while renewable devices like solar cookers, solar water heaters, and windmills are cut to 5%, signalling policy shift toward clean energy.
| Description | Old Rate | New Rate |
| Coal, lignite, peat | 5% | 18% |
| Solar cookers, solar water heaters, renewable devices | 12% | 5% |
Impact: The GST hike on coal from 5% to 18% addresses the issue of inverted duty accumulation in the mining sector but significantly raises costs for industries dependent on coal, such as power, cement, and steel. These costs are likely to be passed on to end consumers. On the other hand, reducing GST to 5% on renewable energy devices and equipment improves project viability, lowers capital costs, and signals a strong policy shift towards accelerating clean energy adoption in line with India’s climate commitments.
H. Consumer Durables & Electronics
To make essential appliances more accessible, GST on ACs, TVs, and dishwashers has been reduced from 28% to 18%. Communication devices for defense/police also see relief.
| Description | Old Rate | New Rate |
| Air conditioners, dishwashers, televisions (≤32 inches) | 28% | 18% |
| Communication radios, walkie-talkies (defense/police) | 12% / 18% | 5% / Exempt |
Impact: The reduction of GST from 28% to 18% on consumer appliances such as air-conditioners, televisions, and dishwashers enhances affordability and is expected to drive demand, particularly during the festive season. This move also eases working capital pressures for manufacturers and distributors. Relief on communication devices used by defense and police strengthens public infrastructure and enhances security readiness. Overall, the measures are poised to boost consumption, support domestic manufacturing, and expand access to essential household technologies.
I. Transport Services
The GST Council has rationalised transport rates into a clear two-slab structure of 5% without ITC and 18% with ITC. Passenger and goods transport options have been streamlined, providing businesses flexibility in choosing credit-linked or concessional rates.
| Service Description | Old Rate | New Rate | ITC Availability |
| Air passenger transport (other than economy) | 12% | 18% | ITC available |
| Passenger transport by motor vehicle (fuel incl.) | 12% | 18% (standard) / 5% (concessional) | 18% with ITC; 5% without ITC |
| Renting of motor vehicles (fuel incl.) | 12% | 18% (standard) / 5% (concessional) | 18% with ITC; 5% without ITC |
| Goods transport by GTA | 12% | 18% (FCM) / 5% (RCM/FCM) | 18% with ITC; 5% without ITC |
| Rail/container transport (other than Indian Railways) | 12% | 18% / 5% | 18% with ITC; 5% without ITC |
| Pipeline transport of fuels | 12% | 18% / 5% | 18% with ITC; 5% without ITC |
Impact: The rationalisation brings clarity and flexibility but increases cost under the ITC-eligible option. Logistics providers and transport operators will need to carefully evaluate whether to operate under the concessional 5% scheme or the 18% credit-linked structure depending on their client profiles.
J. Insurance
The Council has proposed major relief for insurance services by exempting life and health insurance, while reducing the GST rate for third-party motor insurance.
| Service Description | Old Rate | New Rate | ITC Availability |
| Life insurance premiums | 18% | Exempt | ITC not available |
| Health insurance premiums | 18% | Exempt | ITC not available |
| Third-party insurance for goods carriag | 12% | 5% | ITC available |
Impact: Exemptions on life and health insurance will make coverage more affordable, supporting higher insurance penetration. However, exemption leads to ITC blockage for insurers. The reduction on third-party motor insurance premiums benefits the logistics and transport sector by lowering compliance costs.
K. Restaurants (Specified Premises Clarification)
The Council clarified that standalone restaurants cannot classify as “specified premises.” They will continue to be taxed at 5% without ITC.
| Service Description | Old Rate | New Rate | ITC Availability |
| Standalone restaurants | 5% | 5% | ITC not available |
Impact: This clarification prevents misclassification and ensures uniformity. However, since ITC remains blocked, standalone restaurants continue to absorb tax costs on inputs, even though customers benefit from lower tax outgo.
L. Job Work Services
Rates have been rationalised to support specific industries while increasing the levy for generic job work.
| Service Description | Old Rate | New Rate | ITC Availability |
| Job work for pharma, leather, printing, umbrella, bricks | 12% | 5% | ITC available |
| Other job work services | 12% | 18% | ITC available |
Impact: The rationalisation reduces costs for sectors such as pharma, printing, and leather, helping MSMEs. However, the higher 18% levy on generic job work may burden smaller players outside these specified industries, increasing compliance and cash flow challenges.
Applicability of Rates on Transition (Section 14)
| Scenario | Supply Done | Invoice | Payment | Time of Supply (Rule) | Which Rate Applies |
| 1 | Before rate change | After | After | Earlier of Invoice/Payment Date | New Rate |
| 2 | Before rate change | Before | After | Date of Invoice | Old Rate |
| 3 | Before rate change | After | Before | Date of Payment | Old Rate |
| 4 | After rate change | Before | After | Date of Payment | New Rate |
| 5 | After rate change | Before | Before | Earlier of Invoice/Payment Date | Old Rate |
| 6 | After rate change | After | Before | Date Of Invoice | New Rate |
Note:
- Date of payment is the earlier of entry in supplier’s books or credit in bank account.
- If bank credit occurs after 4 working days from invoice date, then actual bank credit date is treated as the date of payment.
- For the supply of goods, the time of supply is deemed to be the date of invoice as per Notification No. 66/2017-CT Dt. 15.11.2017. Therefore, the applicable tax rate would be the rate prevailing on the date of invoicing, and the provisions of Section 14 would apply accordingly.
Reference to Annexure
For ease of reference and implementation, a comprehensive sector-wise and HSN-wise tabulation of all rate changes, exemptions, and ITC conditions is provided in the annexure below. This detailed mapping ensures clarity for stakeholders across industries and supports accurate classification, invoicing, and compliance planning.
Conclusion
The 56th GST Council’s recommendations mark a pivotal recalibration of India’s indirect tax landscape, balancing fiscal prudence with sectoral stimulus. By rationalizing rates, expanding exemptions, and clarifying ITC eligibility, the Council has addressed long-standing industry concerns while paving the way for smoother compliance and greater economic inclusivity. These changes are not merely arithmetic, they reflect a strategic shift toward harmonized taxation, sectoral competitiveness, and transparent governance.
Annexure
Sector-wise GST Rate Rationalisation on Goods and Services (with HSN / SAC Codes)
Sector |
Old Rate |
New Rate |
HSN / SAC (grouped) |
Representative Items / Scope |
ITC availability / condition |
Food |
5% |
Nil |
0401, 0406, 1905, 1905 / 2106 |
UHT milk; Paneer (pre‑packaged & labelled); Pizza bread; Khakhra / chapathi / roti |
|
Food |
18% |
Nil |
2106 |
Paratha, parotta & other Indian breads (by any name) |
|
Food |
12% |
5% |
0402 91 10, 0402 99 20, 0405, 0406, 0801, 0802, 0804, 0805, 0813, 1108, 1501-1506, 1516-1518, 1601-1605, 1701, 1704, 1902, 1905 90 30, 2001-2009, 2009 89 90, 2101 30, 2102, 2103, 2106 (texturised veg proteins, batters), 2106 90 (namkeens), 2106 90 91 (diabetic foods), 2201 (20L bottles), 2202 99 10, 2202 99 20, 2202 99 30 |
Condensed milk; ghee / butter / dairy spreads; cheese; dried nuts & fruits; starches; animal / marine fats & oils; prepared meats / fish; refined sugar; sugar‑boiled confectionery; pasta; extruded / expanded snacks; pickles / veg & fruit preserves; fruit juices incl. tender coconut water; roasted chicory; yeasts; sauces & condiments; soya bari / mungodi / batters; namkeens; diabetic foods; drinking water (20L); soya milk drinks; fruit‑pulp / juice drinks (non‑carbonated); beverages containing milk |
|
Food |
18% |
5% |
1107, 1302, 1520 00 00, 1521, 1522, 1702, 1804, 1805, 1806, 1901, 1904, 2104, 2105 00 00, 2106 (food prep n.e.s.), 2201 (non‑flavoured, no sugar), 2202 99 (plant‑based milk drinks), 3503, 3505 |
Malt; vegetable saps / extracts & thickeners; glycerol; vegetable / bees waxes; degras; other sugars & syrups; cocoa butter / powder / chocolates; malt extract & certain food preparations; cereal flakes; soups / broths; ice‑cream & edible ice; food preparations n.e.s.; waters (not flavoured / sugared); plant‑based milk drinks; gelatin; dextrins & starch‑based glues |
|
Food |
18% |
40% |
2202 91 00, 2202 99 |
Other non‑alcoholic beverages (non‑alcoholic, non‑aerated categories) |
|
Food |
28% |
40% |
2106 90 20; 2202 10; 2202 (Carbonated beverages of fruit drink / with fruit juice); 2202 99 90 |
Pan masala; aerated waters; carbonated beverages of fruit drink / with fruit juice; caffeinated beverages |
|
Tobacco |
18% |
5% |
1404 90 10; 1404 90 50 |
Bidi wrapper leaves (tendu); Indian katha |
|
Tobacco |
28% |
18% |
2403 |
Bidis |
|
Tobacco |
28% |
40% |
2401; 2402; 2403; 2404 11 00; 2404 19 00 |
Unmanufactured tobacco (other than leaves); cigarettes / cigars / cigarillos; other manufactured tobacco; products for inhalation without combustion (tobacco / nicotine) |
|
Agriculture |
12% |
5% |
8408 (≤15HP); 8414 20 20; 8424 (nozzles); 8424 (sprinklers, drip systems, sprayers); 8432 (+ parts 8432 90); 8433; 8436; 8479 (composters); 8701 (tractors, except specified road tractors); 8716 20 00; 8716 80 |
Diesel engines ≤15HP; hand pumps; drip / sprinkler irrigation nozzles & systems; soil preparation / harvesting / poultry & beekeeping machinery & parts; composting machines; tractors (most); agricultural trailers; hand‑propelled / animal‑drawn vehicles |
|
Agriculture |
18% |
5% |
4011, 4011 70 00, 4013 90 49 |
Rear tractor tyres, tyre tubes; tractor tyres / tubes |
|
Fertilizer |
18% |
5% |
2807; 2808; 2814 |
Sulphuric acid; nitric acid; ammonia |
|
Fertilizer |
12% |
5% |
29 / 380893; 3808 (bio‑pesticides list); 28 or 38 (micronutrients per FCO) |
Gibberellic acid; bio‑pesticides (Bt variants, Trichoderma spp., Pseudomonas fluorescens, NPV, neem, cymbopogon); specified micronutrients (FCO‑registered) |
|
Coal |
5% |
18% |
2701; 2702; 2703 |
Coal; lignite; peat (incl. agglomerates) |
|
Renewable Energy |
12% |
5% |
7321 / 8516; 8419 12; 84,85,94 (renewable devices & parts); 87 (fuel‑cell motor vehicles ≤4000mm) |
Solar cookers; solar water heaters; designated renewable energy devices & parts; fuel‑cell (hydrogen) motor vehicles (≤4000mm) |
|
Textiles |
12% / 18% |
5% |
5401; 5402‑5406; 5508; 5509‑5511; 5601‑5607; 5609; 5701‑5705; 5802‑5805; 5807‑5811; 5901‑5902 |
Man‑made filament / staple yarns & sewing thread; waddings / felts / non‑wovens; rubberised / plastic‑coated yarn; metallised / gimped / chenille yarn; twine / cordage / ropes; carpets & rugs; terry / tufted fabrics; gauze / tulles / lace / tapestries / labels / trimmings; embroidery / quilted products; book cloth / tracing canvas; tyre cord fabrics |
|
Paper & Packaging |
12% |
Nil |
4802 (exercise / graph / lab notebooks); 4820 (exercise books); 4905 (maps & charts) |
Exercise / graph / lab notebooks; exercise books; maps & charts |
|
Paper & Packaging |
12% |
5% |
4802 (hand‑made paper & paperboard); 4817 30; 4819 10, 4819 20; 4823; 48 (paper splints, asphaltic roofing); 48 (paper sacks / bags) |
Hand‑made paper; paper stationery compendiums; cartons / boxes / cases; moulded paper‑pulp trays; splints for matches; asphaltic roofing; paper sacks / bags |
|
Paper & Packaging |
12% |
18% |
4804; 4805; 4806 20 00; 4806 40 10; 4807; 4808; 4810; 4802 (other uncoated writing / printing) |
Kraft / other uncoated papers; greaseproof & glassine; composite paper; embossed / corrugated; coated papers; other uncoated writing / printing |
|
Personal Care |
18% |
5% |
3304; 3305; 3306; 3307 (shaving); 3401 |
Talcum / face powder; hair oil & shampoos; toothpaste & dental floss; shaving cream / lotions & aftershave; toilet soap (bars / cakes) |
|
Personal Care |
12% |
5% |
33061010 |
Tooth powder |
|
Home Fragrance |
12% |
18% |
33074100 |
Odoriferous preparations operating by burning (other than agarbatti etc.) |
|
Healthcare & Pharma |
12% |
5% |
28 (Anaesthetics, steam, potassium iodate, iodine 2801 20); 2804 40 10 (medical oxygen); 2847 (medicinal H2O2); 3001‑3006 (wide range of medicaments & pharmaceutical goods) |
Anaesthetics; steam; potassium iodate; iodine; medical oxygen; medicinal H2O2; medicaments in Chapters 3001‑3006 |
|
Healthcare & Pharma |
5% |
Nil |
30 (Agalsidase Beta; Imiglucerase; Eptacog alfa activated) |
Specific life‑saving drugs |
|
Healthcare & Pharma |
12% |
Nil |
30 (Onasemnogene abeparvovec; Asciminib; Mepolizumab; Pegylated Liposomal Irinotecan; Daratumumab (incl. SC); Teclistamab; Amivantamab; Alectinib; Risdiplam; Obinutuzumab; Polatuzumab vedotin; Entrectinib; Atezolizumab; Spesolimab; Velaglucerase Alpha; Agalsidase Alfa; Rurioctocog Alpha Pegol; Idursulphatase; Alglucosidase Alfa; Laronidase; Olipudase Alfa; Tepotinib; Avelumab; Emicizumab; Belumosudil; Miglustat; Velmanase Alfa; Alirocumab; Evolocumab; Cystamine Bitartrate; C1‑Inhibitor injection; Inclisiran) |
Specified advanced drugs & biologics |
|
Healthcare & Pharma |
12% |
5% |
111 (FF / UMEC / VI; Brentuximab vedotin; Ocrelizumab; Pertuzumab; Pertuzumab+Trastuzumab; Faricimab) |
Other specified drugs |
|
Household & Infant |
12% |
5% |
3926 (feeding bottles; plastic beads); 4014 (nipples); 4015 (surgical / medical rubber gloves); 4016 (rubber bands) |
Feeding bottles; plastic beads; nipples; rubber gloves; rubber bands |
|
Household & Infant |
5% |
Nil |
4016 (erasers) |
Erasers |
|
Stationery & Education |
18% |
5% / Nil |
96032100 (toothbrushes 18→5); 9608 / 9609 (pencils, crayons, chalk 12→Nil) |
Toothbrushes; pencils / crayons / chalk |
|
Stationery & Education |
12% |
5% |
3605 00 10; 3701; 3705; 3706; 3818; 4701‑4706 (various rates); 5401 etc (textile overlap) |
Safety matches; x‑ray films; photographic films; silicon wafers; various pulps (see Paper section for rates) |
|
Wood & Cork |
12% |
5% |
4404‑4421 (multiple lines incl. hoopwood, wood flour, sleepers, veneers, bamboo flooring, frames, packing cases, carved wood, casks / barrels, tools / handles, bamboo joinery, tableware / kitchenware, marquetry, ornaments, hangers, spools, match splints, etc.); 4502‑4504 (natural & agglomerated cork; art ware of cork) |
Extensive list of wood & cork products including handicraft articles |
|
Leather |
12% |
5% |
4107; 4112; 4113; 4114; 4115 |
Bovine / equine; sheep / lamb; other animal leathers; chamois / patent / metallised; composition leather & wastes |
|
Optical & Photographic |
12% |
5% |
3701 (x‑ray film); 3705; 3706; 9001; 9003 |
Photographic plates / films; contact lenses; spectacle frames & mountings |
|
Base Metal Artware |
12% |
5% |
8306 |
Bells, gongs, statuettes & frames etc. of base metal |
|
Hardware & Household |
12% |
5% |
7310 / 7323 / 7612 / 7615 (milk cans); 7317 (animal shoe nails); 8420 (hand‑operated rubber roller); 6909 (ceramic packing jars); 7015 10 (glasses for corrective spectacles & flint buttons); 7020 (globes / chimneys for lamps) |
Milk cans; shoe nails; rubber roller; ceramic / glass household hardware |
|
Fasteners & Closures |
12% |
5% |
9607 |
Slide fasteners & parts |
|
Handicrafts & Arts |
12% |
5% |
44 / 68 / 83 (idols of wood / stone / metals); 9701‑9706 (paintings, engravings, sculptures, collections, antiques) |
Idols; paintings & art; sculptures; antiques & collections |
|
Construction Materials |
12% |
5% |
68 (Sand‑lime bricks; stone inlay work) |
Sand‑lime bricks; stone inlay work |
|
Construction Materials |
28% |
18% |
2523 |
Cement (Portland, aluminous, slag, supersulphate, clinkers) |
|
Automotive Engines & Parts |
28% |
18% |
8407; 8408; 8409; 8413 (selected fuel / lube / cooling pumps); 8511; 8507 (non‑Li‑ion accumulators / power banks) |
Spark‑ignition & diesel engines; parts; fuel / lube / cooling pumps; ignition / starting equipment; non‑Li‑ion accumulators |
|
Nuclear |
12% |
5% |
8401 |
Fuel elements (cartridges) for nuclear reactors |
|
Oil & Gas Operations Inputs |
12% |
18% |
Any Chapter (specified petroleum operations list) |
Goods required for petroleum / CBM operations under specified schemes |
|
Biofuels |
12% |
18% |
3826 |
Biodiesel (other than supplied to OMCs for HSD blending) |
|
Arms & Smoking Accessories |
28% |
40% |
9302; 9614 |
Revolvers & pistols (non‑rifles); smoking pipes / cigarette holders & parts |
|
Other Proposals |
28% / 18% |
5% |
8806 |
Unmanned aircrafts |
|
Baggage / Personal Use (IGST) |
28% |
18% |
9804 |
All dutiable articles intended for personal use |
ITC N / A (IGST on baggage) |
Baggage / Personal Use (IGST) |
12% |
5% |
9804 |
All drugs & medicines intended for personal use |
ITC N / A (IGST on baggage) |
IGST Exemptions (Imports) |
18% |
Nil |
49; 71; Any Chapter; 88 / 8536; 84 / 85; 84 / 85 / 87 / 90 / 93; 88; 89; 8807 |
Tech documentation; small diamonds; works of art & antiques; flight / target simulators; HACFS parts; IADWS parts; military transport aircraft; deep submergence & unmanned underwater vessels; ejection seats |
ITC N / A on exempt imports |
Transportation (Passengers) |
12% |
18% |
9964 |
Air transport of passengers in other than economy class |
ITC available |
Transportation (Passengers) |
— / 12% |
18% (option) |
9964 |
Passenger transport by motor vehicle (fuel cost included): concessional option 5% with ITC of input services (same line) continues; standard option revised 12%→18% with ITC |
5% option: restricted ITC; 18% option: full ITC |
Transportation (Goods) |
12% / 5% |
18% / 5% |
9965 / 9967 (rail / container, pipeline) |
Goods in containers by rail (other than IR): standard rate to 18% with ITC; concessional 5% without ITC; pipeline transport of specified fuels: 5% without ITC or 18% with ITC |
At 5%: no / limited ITC; at 18%: ITC available |
Transportation (GTA) |
12% |
18% (FCM option) / 5% w / o ITC (RCM / FCM) |
9965 |
GTA: 5% without ITC (RCM / FCM) or 18% with ITC (FCM) replacing earlier 12% with ITC |
5%: no ITC; 18%: ITC available |
Transportation (Rentals) |
12% |
18% (option) |
9966 |
Renting of passenger motor vehicles (with operator, fuel cost included): concessional 5% with restricted ITC continues; standard rate revised to 18% with ITC |
5% option: restricted ITC; 18% option: ITC available |
Transportation (Goods carriage rentals) |
12% |
18% / 5% (restricted) |
9966 |
Renting of goods carriage (with operator): 5% with restricted ITC or 18% with ITC |
5% option: restricted ITC; 18% option: ITC available |
Transportation (Multimodal) |
12% |
18% / 5% (restricted) |
9965 |
Multimodal transport of goods within India: 5% (where no leg is by air) with restricted ITC; otherwise 18% with ITC |
5%: restricted ITC; 18%: ITC available |
Job Work |
12% |
5% |
9988 |
Umbrella; printing (Ch.48 / 49); bricks (5% items); pharma (Ch.30); hides / skins / leather (Ch.41) |
ITC available |
Job Work (Residual) |
12% |
18% |
9988 |
All job‑work services not elsewhere covered |
ITC available |
Works Contracts (Oil & Gas offshore) |
12% |
18% |
9954 |
Composite supply of works contract & associated services for offshore oil & gas E&P |
ITC available |
Works Contracts (Earthwork to Govt.) |
12% |
18% |
9954 |
Predominantly earthwork (>75%); and sub‑contractor to such main contractor (Govt.) |
ITC available |
Local Delivery Services |
18% |
18% (scope change) |
996813 / Sec.9(5) |
Local delivery services incl. restaurant delivery: to be notified under Sec.9(5) for ECO where supplier not liable for registration (rate remains 18%) |
ITC available where applicable to ECO |
Other Services |
12% |
5% |
9971 / 9994 / 9996 |
Third‑party insurance of goods carriage; CETP effluent treatment; biomedical waste treatment; cinema admission ≤₹100 |
ITC available at 5% for CETP / biomedical? (concessional with ITC per Annexure); cinema 5% with ITC |
Beauty & Wellness |
18% |
5% (without ITC) |
99972 |
Beauty and physical well‑being services (group 99972) now at 5% without ITC |
No ITC (explicit) |
Entertainment / Gaming |
28% |
40% (with ITC) |
9996 / actionable claims (goods) |
Admission to casinos / race clubs / sporting events like IPL; licensing of bookmakers; leasing / rental of goods falling under 40% GST; specified actionable claims (betting, casinos, gambling, horse racing, lottery, online money gaming) |
ITC available |
Insurance (Individual) |
18% |
Exempt |
9971 |
All individual health insurance and life insurance (and reinsurance thereof) – proposed exemption |
No ITC (exempt) |
Disclaimer
This alert has been prepared for general information purposes only and does not constitute professional advice. Readers are advised not to act solely on the basis of the information contained herein and should seek specific professional guidance before taking any decisions. The authors accept no responsibility for any loss arising from reliance on the material presented in this document.
Also Read:
Author Bio
