GST Rate Changes w.e.f. 22nd September 2025 – Topic-wise Analysis

GST Rate Changes w.e.f. 22nd September 2025 – Topic-wise Analysis of Notifications 11 to 17/2025 (CTR)

Introduction

The GST Council, in its 56th meeting, recommended changes in GST rates on specific goods and services. To implement these decisions, the Government issued Notifications No. 11 to 17/2025 – Central Tax (Rate) on 17th September 2025, which come into force from 22nd September 2025.

This article explains the changes topic-wise, along with tables, examples and compliance notes for better clarity.

1. GST on Goods

(a) Handicrafts & Artisan Products

• Several handicraft items now taxed at 5% GST (2.5% CGST + 2.5% SGST).
• Includes: wooden & cork articles, handmade carpets and rugs, paintings, sculptures, handcrafted lamps, imitation jewellery, toys, decorative products etc.

Rate Comparison

Impact: Significant relief for artisans, MSMEs and exporters.

(b) Construction Materials

• Notified at 12% GST (6% CGST + 6% SGST).
• Covers fly ash bricks, fly ash blocks, building bricks, roofing and earthen tiles.

Rate Comparison

Impact: Reduced cost of construction inputs.

(c) Other Goods – Notification 11/2025

• Substitution in Notification 3/2017-CTR (S. No.1 entry).
• Goods under this entry will now attract 18% GST (9% CGST + 9% SGST).
• Action Point: Businesses dealing in such goods must update their HSN rate mapping.

2. GST on Services

(a) Transport & Courier Services

• GTA, multimodal transport, courier services, renting of goods carriage → 18% GST.
• Impact: Brings uniformity, simplifies classification.

(b) Job Work Services

• Revised rates:

Example:

If a diamond job worker charges ₹1,00,000 → GST = ₹1,500 (1.5%) instead of ₹18,000 (18%).

(c) Beauty & Wellness Services

• Clarified at 5% GST, without ITC.
• If ITC availed, normal rate 18% applies.

3. Exemptions & Nil Rated Supplies

(a) Insurance (Notification 16/2025)

• Exempt (Nil rate):
  • Life insurance (individual/family).
  • Health insurance (individual/family).
  • Related re-insurance.
• Not exempt: Group insurance.

(b) Local Delivery via E-commerce (Notification 17/2025)

• Local delivery services via ECO exempt.
• Exception: Supplier required to register under Section 22(1).

4. Technical Amendment (Notification 12/2025)

• References to “Schedule IV of Notification 1/2017” replaced with “Schedule II/III of Notification 9/2025”.
• This is a reference update for alignment purposes.

5. Compliance Checklist

1. Update ERP with revised HSN/SAC codes and rates.

2. Apply concessional service rates only where ITC is not availed.

3. Revise contracts and invoices effective 22.09.2025.

4. Inform clients/customers in affected sectors (handicrafts, construction, transport, insurance).

5. Recalculate costing for ongoing projects.

6. Sector-wise Impact

• Artisans/MSMEs: Lower GST on handicrafts improves competitiveness.
• Real Estate/Construction: Cost saving due to 12% rate on bricks and tiles.
• Logistics/Transport: Uniform 18% rate removes confusion.
• Job Workers: Huge relief in textiles and diamonds with reduced GST burden.
• Insurance: Individual life & health insurance exempt; group cover still taxable.
• E-commerce: Local delivery exempt for small operators, but large suppliers must check registration liability.

Conclusion

These notifications mark an important step towards rationalising GST rates. Relief has been provided to priority sectors such as handicrafts, construction and insurance, while uniformity has been ensured in transport and courier services.

Businesses must carefully check the conditions (especially “without ITC” clauses) before applying reduced rates. From 22nd September 2025, taxpayers are advised to update systems, invoices and contracts to ensure smooth compliance.

Read: