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Executive Summary This article provides a comprehensive analysis of the significant tax reforms announced by the Goods and Services Tax (GST) Council in its 56th meeting held in New Delhi. The recommendations, which come into effect from September 22, 2025 (except for tobacco products), represent a
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FAQ :
The majority of the GST rate changes announced by the 56th GST Council meeting will come into effect from September 22, 2025. However, tobacco products will have a different implementation timeline, dependent on the discharge of compensation cess loan liabilities.
UHT milk will become exempt from GST, while plant-based and soya milk beverages will see a reduction to 5% GST. Indian breads like roti and paratha will also be exempt, and pre-packaged paneer will receive a concessional rate. Toilet soaps, face powders, and shampoos will be reduced to 5% GST.
Pharmaceuticals and medical devices will see their GST rate reduced from 12% to 5%. Furthermore, individual life insurance and health insurance policies will become exempt from GST.
Small cars (petrol up to 1200cc, diesel up to 1500cc) and motorcycles up to 350cc will see their GST reduced to 18%. However, luxury automobiles, SUVs, and motorcycles over 350cc will now attract a 40% GST.
Yes, air conditioning systems and dishwashing machines will have their GST reduced to 18%. Televisions and monitors will have a uniform 18% GST, regardless of screen size. Batteries (Li-ion and others) will also be uniformly taxed at 18%.
Passenger transportation services will offer a choice between 5% GST with no Input Tax Credit (ITC) or 18% GST with full ITC. Hotel accommodation priced up to ₹7,500 per unit per day will be taxed at 5% with no ITC, aimed at boosting tourism.
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