Press Release, Dated 03-09-2025
1. Key Outcomes of the 56th GST Council Meeting
The GST Council convened its 56th meeting in New Delhi under the chairpersonship of the Union Finance Minister. The meeting focused on major policy decisions to simplify the GST framework and address sectoral concerns. The Council recommended significant revisions in GST rates on both goods and services, rationalisation of inverted duty structures, and exemptions on certain essential items. These measures aim to reduce compliance burden and ensure fair tax treatment across industries.
2. Revisions in GST Rates on Goods and Services
One of the highlights of the meeting was the reduction in GST rates for key sectors. Agricultural machinery, renewable energy devices, and bicycles received substantial relief to promote rural development and green energy initiatives. Similarly, medicines and medical devices witnessed rationalised rates, ensuring affordable healthcare access. The automobile sector, textiles, processed food items, and beauty and wellness services also saw revisions, making products and services in these industries more cost-effective for consumers.
3. Clarifications and Procedural Simplifications
Beyond rate changes, the Council also addressed important procedural issues. Recommendations were made for clarifications on Input Tax Credit (ITC) refunds to reduce litigation and disputes. Amendments in rate applicability based on time of supply provisions were also approved, providing greater clarity for businesses. Additionally, rationalisation measures were introduced for transport services and job work, ensuring uniform application of tax laws and easing operational challenges faced by stakeholders.
4. Effective Date and Continuation of Compensation Cess
The Council further announced that revised rates on goods and services, except for specified tobacco products, will come into effect from 22nd September 2025. Importantly, the existing rates and compensation cess applicable to cigarettes, chewing tobacco, zarda, unmanufactured tobacco, and beedi will continue unchanged. This decision was taken to ensure repayment of loans and discharge of interest obligations under the compensation cess account, maintaining fiscal balance while gradually phasing out cess-related liabilities.
