India's GST 2.0: Is Your Daily Shopping About to Get Cheaper? (56th Council Meeting, 2025 Decoded)

Namaste, trailblazers and future-ready entrepreneurs! 👋

Get ready for a massive leap forward in India’s tax landscape! Prime Minister Shri Narendra Modi, from the iconic ramparts of the Red Fort on August 15, 2025, heralded the arrival of "next-generation GST reforms." This isn't just an update; it's a strategic, citizen-centric evolution designed to simplify things, enhance lives, and make doing business in India smoother than ever, especially for us – the small traders, budding side hustlers, and aspirational middle class.

The **56th GST Council Meeting**, held in New Delhi on **September 3, 2025**, has laid out the blueprint for these transformative changes. This meeting, chaired by the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, addressed everything from tax rates to procedural reforms, aiming for a multi-sectoral and multi-thematic focus on improving lives and ensuring ease of doing business for all.

Forget the old complexities. We're talking about a significant overhaul that impacts common man items, labour-intensive industries, farmers, healthcare, and key drivers of our economy. In this ultimate guide, we’ll break down every crucial recommendation, explaining what’s changing, why it matters, and how you, as an Indian entrepreneur, can leverage these reforms to your advantage. Let’s dive into India’s GST 2.0!

Table of Contents

1. Introduction to GST 2.0: A New Era of Tax in India
2. The Heart of Reform: A Simplified 2-Rate Structure & De-Merit Rate
3. Major Boost for Common Man: GST Exemptions on Life & Health Insurance (Services)
4. Relief for the Common Man: Big Rate Cuts on Daily Essentials (Goods)
5. Nourishing India: GST Cuts for Food Items & Agricultural Goods
6. Healing Touch: Significant GST Reductions in Healthcare & Medicines
7. Investing in Knowledge: GST Changes for Educational Items
8. Empowering Artisans: GST Reductions for Labour-Intensive Goods & Handicrafts
9. Driving Down Costs: GST Rationalization for the Automotive Sector
10. Building the Future: GST Changes for Cement & Construction Materials
11. Weaving Growth: Correcting Inverted Duty Structures in Textiles & Fertilizers
12. Greener Future: Promoting Renewable Energy Devices
13. Streamlining Travel & Logistics: GST Changes for Transportation Services
14. Tourism & Well-being: GST Cuts for Hotel Accommodation & Wellness Services
15. Supporting Manufacturing: GST Changes for Job Work Services
16. The Rise of Hyperlocal: GST on Local Delivery Services
17. Miscellaneous Goods & Services: Other Noteworthy Changes
18. Streamlining Business: Key Procedural Reforms & Facilitation Measures
19. Faster Justice: Operationalization of the GST Appellate Tribunal (GSTAT)
20. Other Important Valuation & Clarification Changes
21. Phased Implementation: Understanding the Effective Dates
22. The Grand Impact: What These GST Reforms Mean for Your Side Business & Startup
23. Your Future-Ready Action Plan: Navigating GST 2.0
24. Wrapping Up: Embracing the Future of GST in India
25. Let's Discuss & Grow Together!

1. Introduction to GST 2.0: A New Era of Tax in India

The GST regime, since its inception, has continuously evolved to become more efficient, transparent, and taxpayer-friendly. The recommendations from the 56th GST Council Meeting are arguably the most ambitious yet, signaling a pivot towards a truly simplified and inclusive tax structure – what we can rightfully call **GST 2.0**.

This "next-generation" reform isn't just about tweaking numbers; it's about fundamentally rethinking how GST impacts the common citizen, small businesses, and critical sectors. The emphasis is on:

• Affordability: Making essential goods and services cheaper.
• Ease of Doing Business: Simplifying compliance and reducing burdens, especially for small traders.
• Boosting Key Sectors: Providing targeted relief to agriculture, healthcare, and labour-intensive industries.
• Rationalization: Moving towards a cleaner, simpler tax rate structure.

Prime Minister Modi's vision of a "strategic, principled, and citizen-centric evolution" is truly taking shape. Let’s explore the details.

2. The Heart of Reform: A Simplified 2-Rate Structure & De-Merit Rate

Perhaps the most groundbreaking recommendation is the overhaul of the current 4-tiered tax rate structure. The Council has approved a move towards a far more citizen-friendly **'Simple Tax' with a 2-rate structure**:

• Standard Rate: 18%
• Merit Rate: 5%

Additionally, a **special de-merit rate of 40%** will be applied to a select few goods and services, typically those considered 'sin goods' or luxury items that the government intends to discourage.

Why This Matters:

This shift from multiple rates (like 5%, 12%, 18%, 28%) to essentially two main rates (5% and 18%) is massive. It will:

• Reduce Confusion: Simpler rates mean less ambiguity for businesses and consumers.
• Improve Compliance: Fewer rates can lead to fewer classification disputes and easier tax calculations.
• Boost Efficiency: Streamlined processes for businesses, especially small ones, who often struggle with complex rate classifications.

Chart: Simplified GST Rate Structure (Proposed GST 2.0)

(Image Placeholder: A clean bar chart or infographic showing three distinct bars: 5% (Merit Rate, with a green/blue color), 18% (Standard Rate, with a neutral/grey color), and 40% (De-Merit Rate, with an orange/red color). Each bar should have a small icon representing its category, e.g., a leaf for merit, a building for standard, and a luxury item for de-merit.)

3. Major Boost for Common Man: GST Exemptions on Life & Health Insurance (Services)

In a direct move to enhance financial security and health accessibility for citizens, the Council has recommended **exempting GST on all individual life insurance policies** (whether term life, ULIP, or endowment policies) and **reinsurance thereof**. Similarly, **all individual health insurance policies** (including family floater policies and policies for senior citizens) and their reinsurance will also be **exempt from GST**.

Impact on You & Your Customers:

• More Affordable Insurance: This is a massive relief, making crucial insurance products significantly cheaper for the common man.
• Increased Coverage: Lower costs are expected to encourage more people to opt for insurance, thereby increasing insurance penetration in India.
• Indirect Economic Benefit: A healthier and more financially secure population is better positioned to participate in the economy, indirectly benefiting small businesses.

Table: GST Exemptions on Insurance Services

S.No.	HSN Code	Description of Service	Old GST Status	New GST Status
1	9971	All individual health insurance, along with reinsurance thereof	18% with ITC	Exemption
2	9971	All individual life insurance, along with reinsurance thereof	18% with ITC	Exemption

4. Relief for the Common Man: Big Rate Cuts on Daily Essentials (Goods)

The 56th GST Council Meeting has delivered fantastic news for every household by significantly reducing GST rates on a wide array of common man items. This directly translates to more savings in your pocket!

Key Items Seeing Rate Reductions:

Table: Detailed GST Reductions on Common Man Items

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 18% to 5%
3304	Talcum powder, Face powder	18%	5%
3305	Hair oil, shampoo	18%	5%
3306	Dental floss, toothpaste	18%	5%
3307	Shaving cream, shaving lotion, aftershave lotion	18%	5%
3401	Toilet Soap (other than industrial soap) in bars, cakes, moulded pieces or shapes	18%	5%
96032100	Tooth brushes including dental-plate brushes	18%	5%
From 12% to 5%
33061010	Tooth powder	12%	5%
3406	Candles, tapers and the like	12%	5%
3605 00 10	All goods - safety matches	12%	5%
3926	Feeding bottles	12%	5%
4014	Nipples of feeding bottles	12%	5%
4202 22 20	Hand bags and shopping bags, of cotton	12%	5%
4202 22 30	Hand bags and shopping bags, of jute	12%	5%
4419	Tableware and Kitchenware of wood	12%	5%
6601	Umbrellas and sun umbrellas	12%	5%
6603	Parts, trimmings and accessories of umbrellas	12%	5%
6911	Tableware, kitchenware, other household articles and toilet articles, of porcelain or china	12%	5%
6912	Tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china	12%	5%
7319	Sewing needles	12%	5%
7321	Kerosene burners, kerosene stoves and wood burning stoves of iron or steel	12%	5%
7323	Table, kitchen or other household articles of iron & steel; Utensils	12%	5%
7418	Table, kitchen or other household articles of copper; Utensils	12%	5%
7419 80 30	Brass Kerosene Pressure Stove	12%	5%
7615	Table, kitchen or other household articles of aluminium; Utensils	12%	5%
8452	Sewing machines (other than book-sewing machine); furniture, bases and covers specially designed for sewing machines; sewing machines needles and parts	12%	5%
8712	Bicycles and other cycles (including delivery tricycles), not motorized	12%	5%
8714	Parts and accessories of bicycles and other cycles (including delivery tricycles), not motorised, of 8712	12%	5%
9403	Furniture wholly made of bamboo, cane or rattan	12%	5%
9405	Hurricane lanterns, Kerosene lamp / pressure lantern, petromax, glass chimney, and parts thereof	12%	5%
9615	Combs, hair-slides and the like; hairpins, curling pins, curling grips, hair-curlers and the like, other than those of heading 8516, and parts thereof	12%	5%
9619 00 30, 9619 00 40, or 9619 00 90	All goods - napkins and napkin liners for babies, clinical diapers	12%	5%

5. Nourishing India: GST Cuts for Food Items & Agricultural Goods

Food and agriculture are the backbone of India. The Council has focused heavily on making food more affordable and supporting farmers through GST rate rationalization.

What's Getting Cheaper to Eat?

Table: Detailed GST Changes for Food Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 5% to NIL
0401	Ultra-High Temperature (UHT) milk	5%	NIL
0406	Chena or paneer, pre-packaged and labelled	5%	NIL
1905	Pizza bread	5%	NIL
1905 or 2106	Khakhra, chapathi or roti	5%	NIL
From 18% to NIL
2106	Paratha, parotta and other Indian breads by any name called	18%	NIL
From 12% to 5%
0402 91 10, 0402 99 20	Condensed milk	12%	5%
0405	Butter and other fats (i.e. ghee, butter oil, etc.) and oils derived from milk; dairy spreads	12%	5%
0406	Cheese	12%	5%
0801	Brazil nuts, dried, whether or not Shelled or Peeled	12%	5%
0802	Other nuts, dried (Almonds, Hazelnuts, Chestnuts, Pistachios, Macadamia, Kola, Pine nuts)	12%	5%
0804	Dates (soft or hard), figs, pineapples, avocados, guavas, mangoes (other than sliced, dried) and mangosteens, dried	12%	5%
0805	Dried Citrus fruit (Oranges, Mandarins, Grapefruit, Lemons, Limes)	12%	5%
0813	Fruit, dried, other than that of headings 0801 to 0806; mixtures of nuts or dried fruits (other than dried tamarind)	12%	5%
1108	Starches; inulin	12%	5%
1501-1506	Pig fats, poultry fat, fats of bovine animals, sheep or goats, lard stearin, fish/marine mammal fats, wool grease, other animal fats/oils	12%	5%
1516	Partly or wholly hydrogenated animal/microbial fats/oils	12%	5%
1517	Edible mixtures/preparations of animal/microbial fats/oils	12%	5%
1518	Chemically modified animal/microbial fats/oils; inedible mixtures	12%	5%
1601-1605	Sausages, prepared/preserved meat, extracts/juices of meat/fish, prepared/preserved fish/crustaceans/molluscs	12%	5%
1701 91, 1701 99	All goods, including refined sugar, sugar cubes (other than those at 5% or nil GST)	12%	5%
1704	Sugar boiled confectionery	12%	5%
1902	Pasta (spaghetti, macaroni, noodles, lasagne, etc.); couscous	12%	5%
1905 90 30	Extruded or expanded products, savoury or salted (other than un-fried/un-cooked snack pellets)	12%	5%
2001-2009	Prepared/preserved vegetables/fruits/nuts, jams, fruit juices (includes Ground-nuts, Cashew nuts, Mango squash)	12%	5%
2009 89 90	Tender coconut water, pre-packaged and labelled	12%	5%
2101 30	Roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates thereof	12%	5%
2102	Yeasts (active and inactive); prepared baking powders	12%	5%
2103	All goods (Sauces, mixed condiments, mustard flour, Curry paste, mayonnaise, salad dressings)	12%	5%
2106	Texturised vegetable proteins (soya bari), Bari made of pulses including mungodi and batters	12%	5%
2106 90	Namkeens, bhujia, mixture, chabena and similar edible preparations (other than roasted gram), pre-packaged and labelled	12%	5%
2106 90 91	Diabetic foods	12%	5%
2201	Drinking water packed in 20 litre bottles	12%	5%
2202 99 10	Soya milk drinks	12%	5%
2202 99 20	Fruit pulp or fruit juice based drinks (other than Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice)	12%	5%
2202 99 30	Beverages containing milk	12%	5%
From 18% to 5%
1107	Malt, whether or not roasted	18%	5%
1302	Vegetable saps and extracts; pectic substances; agar-agar and other mucilages (other than tamarind kernel powder)	18%	5%
1517 10	All goods i.e. Margarine, Linoxyn	18%	5%
1520 00 00	Glycerol, crude; glycerol waters and glycerol lyes	18%	5%
1521	Vegetable waxes, Beeswax, other insect waxes and spermaceti	18%	5%
1522	Degras, residues from fatty substances or animal/vegetable waxes	18%	5%
1702	Other sugars, sugar syrups not containing added flavouring or colouring matter; artificial honey; caramel (other than palmyra sugar and jaggery)	18%	5%
1704	Sugar confectionery (other than mishri, batasha, chikkis, etc.)	18%	5%
1804-1806	Cocoa butter, fat and oil; cocoa powder; chocolates and other food preparations containing cocoa	18%	5%
1901	Malt extract, food preparations of flour, etc., not containing cocoa or containing less than 40% cocoa; food preparations of goods of heading 0401 to 0404, not containing cocoa or containing less than 5% cocoa	18%	5%
1904	All goods i.e. Corn flakes, bulgar wheat, prepared foods obtained from cereal flakes	18%	5%
1905	Pastry, cakes, biscuits and other bakers’ wares; communion wafers, empty cachets, sealing wafers, rice paper and similar products	18%	5%
2101 11, 2101 12 00	Extracts, essences and concentrates of coffee, and preparations with a basis of these	18%	5%
2101 20	Extracts, essences and concentrates of tea or mate, and preparations with a basis of these	18%	5%
2104	Soups and broths and preparations therefor; homogenised composite food preparations	18%	5%
2105 00 00	Ice cream and other edible ice, whether or not containing cocoa	18%	5%
2106	Food preparations not elsewhere specified or included	18%	5%
2201	Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter nor flavoured	18%	5%
2202 99	Plant-based milk drinks, ready for direct consumption as beverages	18%	5%
3503	Gelatin and gelatin derivatives; isinglass; other glues of animal origin	18%	5%
3505	Dextrins and other modified starches; glues based on starches/dextrins	18%	5%

GST Changes for Tobacco Products:

Table: Detailed GST Changes for Tobacco Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate	Effective Date Note
From 18% to 5%
1404 90 10	Bidi wrapper leaves (tendu)	18%	5%	Sept 22, 2025
1404 90 50	Indian katha	18%	5%	Sept 22, 2025
From 28% to 18%
2403*	Bidi	28%	18%	*Deferred: To be notified based on compensation cess discharge.
From 28% to 40% (De-Merit Rate)
2106 90 20*	Pan masala	28%	40%	*Deferred: To be notified based on compensation cess discharge.
2401*	Unmanufactured tobacco; tobacco refuse (other than tobacco leaves)	28%	40%	*Deferred: To be notified based on compensation cess discharge.
2402*	Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes	28%	40%	*Deferred: To be notified based on compensation cess discharge.
2403*	Other manufactured tobacco and manufactured tobacco substitutes	28%	40%	*Deferred: To be notified based on compensation cess discharge.
2404 11 00*	Products containing tobacco or reconstituted tobacco intended for inhalation without combustion	28%	40%	*Deferred: To be notified based on compensation cess discharge.
2404 19 00*	Products containing tobacco or nicotine substitutes intended for inhalation without combustion	28%	40%	*Deferred: To be notified based on compensation cess discharge.

Relief for Farmers & Agri Sector:

Table: Detailed GST Changes for Agriculture & Fertilizer Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
Agriculture Sector (From 12% to 5%)
8408	Fixed Speed Diesel Engines of power not exceeding 15HP	12%	5%
8414 20 20	Other hand pumps	12%	5%
8424	Nozzles for drip irrigation equipment or sprinklers	12%	5%
8424	Sprinklers; drip irrigation system; mechanical sprayers	12%	5%
8432	Agricultural, horticultural or forestry machinery for soil preparation/cultivation; lawn rollers; Parts	12%	5%
8433	Harvesting or threshing machinery, including balers, mowers; parts thereof	12%	5%
8436	Other agricultural, horticultural, forestry, poultry/bee-keeping machinery; incubators/brooders; parts	12%	5%
8479	Composting Machines	12%	5%
8701	Tractors (except road tractors for semi-trailers of engine capacity > 1800 cc)	12%	5%
8716 20 00	Self-loading or self-unloading trailers for agricultural purposes	12%	5%
8716 80	Hand propelled vehicles (e.g. hand carts, rickshaws); animal drawn vehicles	12%	5%
Fertilizer Sector (From 18% to 5%)
2807	Sulphuric acid	18%	5%
2808	Nitric acid	18%	5%
2814	Ammonia	18%	5%
Fertilizer Sector (From 12% to 5%)
29 or 380893	Gibberellic acid	12%	5%
3808	Bio-pesticides (Bacillus thuringiensis, Trichoderma, Pseudomonas, Beauveria, NPVs, Neem based pesticides, Cymbopogan)	12%	5%
28 or 38	Micronutrients (as per Fertilizer Control Order, 1985)	12%	5%
Tractor Parts & Tyres (From 18% to 5%)
4011	Rear tractor tyres and rear tractor tyre tubes	18%	5%
4011 70 00	Tyre for tractors	18%	5%
4013 90 49	Tube for tractor tyres	18%	5%
8408 20 20	Agricultural Diesel Engine of cylinder capacity exceeding 250 cc for Tractor	18%	5%
8413 81 90	Hydraulic Pumps for Tractors	18%	5%
8708	Tractor parts: wheel rim, centre housing, housing transmission, support front axle, bumpers, brakes, gear boxes, transaxles, road wheels, radiator assembly, cooling system, silencer assembly, clutch assembly, steering wheels, hydraulic, fender, hood, wrapper, grill, side panel, extension plates, fuel tank	18%	5%

GST Changes for Coal Sector:

Table: Detailed GST Changes for Coal Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 5% to 18%
2701	Coal; briquettes, ovoids and similar solid fuels manufactured from coal	5%	18%
2702	Lignite, whether or not agglomerated, excluding jet	5%	18%
2703	Peat (including peat litter), whether or not agglomerated	5%	18%

6. Healing Touch: Significant GST Reductions in Healthcare & Medicines

The Council has shown a strong commitment to making healthcare more accessible and affordable, with substantial GST cuts on a wide range of medicines and medical devices.

Life-Saving Drugs & Medicines:

Table: Detailed GST Changes for Health Sector Goods (Medicines & Devices)

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 5% to NIL
30	Agalsidase Beta, Imiglucerase, Eptacog alfa activated recombinant coagulation factor VIIa	5%	NIL
From 12% to NIL
30	Onasemnogene abeparvovec, Asciminib, Mepolizumab, Pegylated Liposomal Irinotecan, Daratumumab (subcutaneous), 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, CI-Inhibitor injection, Inclisiran (33 drugs)	12%	NIL
From 12% to 5%
28	Anaesthetics	12%	5%
28	Potassium Iodate	12%	5%
28	Steam	12%	5%
2801 20	Iodine	12%	5%
2804 40 10	Medical grade oxygen	12%	5%
2847	Medicinal grade hydrogen peroxide	12%	5%
30	All Drugs and medicines including: Fluticasone Furoate + Umeclidinium + Vilanterol FF/UMEC/VI, Brentuximab Vedotin, Ocrelizumab, Pertuzumab (+ Trastuzumab), Faricimab	12%	5%
3001-3006	Glands & organs for organo-therapeutic uses, animal blood, medicaments (Ayurvedic, Unani, Siddha, homoeopathic, Bio-chemic), wadding/gauze/bandages, pharmaceutical goods (surgical catgut, sutures, sterile tissue adhesives etc. other than contraceptives and Ostomy appliances)	12%	5%
3822	All diagnostic kits and reagents	12%	5%
4015	Surgical rubber gloves or medical examination rubber gloves	12%	5%
90 or any other Chapter	Blood glucose monitoring system (Glucometer) and test strips	12%	5%
90 or any other Chapter	Patent Ductus Arteriosus / Atrial Septal Defect occlusion device	12%	5%
9004	Spectacles and goggles for correcting vision	12%	5%
9018-9022	Instruments/appliances used in medical/surgical/dental/veterinary sciences (scintigraphic, electro-medical, sight-testing, mechano-therapy, massage, ozone/oxygen/aerosol therapy, artificial respiration, breathing appliances, X-ray apparatus)	12%	5%
9804	Other Drugs and medicines intended for personal use	12%	5%
From 18% to 5%
9025	Thermometers for medical, surgical, dental or veterinary usage	18%	5%
9027	Instruments and apparatus for medical, surgical, dental or veterinary uses for physical or chemical analysis.	18%	5%

7. Investing in Knowledge: GST Changes for Educational Items

The GST Council has also recommended crucial rate reductions for a variety of educational and stationery items, directly benefiting students and households.

Table: Detailed GST Changes for Education Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 5% to NIL
4016	Erasers	5%	NIL
From 12% to NIL
4905	Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed	12%	NIL
8214	Pencil sharpeners	12%	NIL
9608, 9609	Pencils (including propelling or sliding pencils), crayons, pastels, drawing charcoals and tailor’s chalk	12%	NIL
4820	Exercise book, graph book, & laboratory note book and notebooks	12%	NIL
From 12% to 5%
7310 or 7326	Mathematical boxes, geometry boxes and colour boxes	12%	5%

8. Empowering Artisans: GST Reductions for Labour-Intensive Goods & Handicrafts

Recognizing the importance of labour-intensive sectors and India's rich tradition of handicrafts, the Council has recommended targeted GST reductions.

Table: Detailed GST Changes for Labour-Intensive & Handicraft Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5% (Handicrafts & Labour-Intensive)
44, 68, 83	Idols of wood, stone (incl. marble) and metals (other than precious metals)	12%	5%
6802	Handicraft Statues, statuettes, pedestals; high or low reliefs, crosses, figures of animals, bowls, vases, cups, writing sets, ashtrays, paper weights, artificial fruit and foliage, etc.; other ornamental goods essentially of stone; carved stone products	12%	5%
6913	Handicraft Statues and other ornamental articles; statuettes & other ornamental ceramic articles (incl blue potteries)	12%	5%
9601	Worked ivory, bone, tortoise shell, horn, antlers, mother of pearl, and other animal carving material and articles of these materials, articles of coral (incl. by moulding); worked articles of ivory, bone, tortoise shell, horn, antlers, coral, mother of pearl, seashell other animal carving material	12%	5%
9701	Handicraft Paintings, drawings and pastels, executed entirely by hand (incl Mysore, Rajasthan, Tanjore, Palm leaf paintings, basoli etc); collages, mosaics and similar decorative plaques	12%	5%
9702	Original engravings, prints and lithographs	12%	5%
9703	Handicraft Original sculptures and statuary, in any material; original sculptures and statuary, in metal, stone or any material	12%	5%
9705	Collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic interest (other than numismatic coins)	12%	5%
9706	Antiques of an age exceeding one hundred years	12%	5%
3406	Handcrafted candles	12%	5%
4202 22, 4202 29, 4202 31 10, 4202 31 90, 4202 32, 4202 39	Handicraft Handbags including pouches and purses; jewellery box	12%	5%
4416, 4421 99 90	Handicraft Carved wood products, art ware/decorative articles of wood (including inlay work, casks, barrel, vats)	12%	5%
4414	Handicraft Wooden frames for painting, photographs, mirrors etc	12%	5%
4420	Handicraft Statuettes & other ornaments of wood, wood marquetry & inlaid, jewellery box, wood lathe and lacquer work (incl. ambadi sisal craft)	12%	5%
4503 90 90, 4504 90	Handicraft Art ware of cork (incl. articles of sholapith)	12%	5%
6117, 6214	Handmade/hand embroidered shawls (value exceeding Rs. 2500 per piece)	12%	5%
68159990	Handicraft Stone art ware, stone inlay work	12%	5%
691200 10, 6912 00 20	Handicraft Tableware and kitchenware of clay and terracotta, other clay articles	12%	5%
6913 90 00	Handicraft Statuettes & other ornamental ceramic articles (incl blue potteries)	12%	5%
7009 92 00	Handicraft Ornamental framed mirrors	12%	5%
7018 90 10	Handicraft Glass statues (other than those of crystal)	12%	5%
7020 00 90	Handicraft Glass art ware (incl. pots, jars, votive, cask, cake cover, tulip bottle, vase)	12%	5%
7326 90 99	Handicraft Art ware of iron	12%	5%
7419 80	Handicraft Art ware of brass, copper/copper alloys, electro plated with nickel/silver	12%	5%
7616 99 90	Handicraft Aluminium art ware	12%	5%
8306	Handicraft Bells, gongs, statuettes, ornaments, photograph/picture frames, mirrors of base metal (incl. Bidriware, Panchloga artware, idol, Swamimalai bronze icons, dhokra jaali)	12%	5%
940510	Handicraft Handcrafted lamps (including panchloga lamp)	12%	5%
940150, 9403 80	Handicraft Furniture of bamboo, rattan and cane	12%	5%
9503	Handicraft Dolls or other toys made of wood or metal or textile material (incl wooden toys of sawantwadi, Channapatna toys, Thanjavur doll)	12%	5%
9504	Handicraft Ganjifa card	12%	5%
9602	Handicraft Worked vegetable or mineral carving, articles thereof, articles of wax, of stearin, of natural gums or natural resins or of modelling pastes etc, (including articles of lac, shellac)	12%	5%
4802	Handmade Paper and Paper board	12%	5%
Leather Sector (From 12% to 5%)
4107, 4112, 4113, 4114, 4115	Leather further prepared after tanning or crusting (bovine, sheep, lamb, other animals); chamois leather; patent leather; metallised leather; composition leather; parings and waste	12%	5%
6701	Skins and other parts of birds with their feathers or down, feathers, parts of feathers, down and articles thereof (other than heading 0505 and worked quills and scapes)	12%	5%

9. Driving Down Costs: GST Rationalization for the Automotive Sector

The automotive sector, a major contributor to the economy, also sees significant GST rationalization, primarily focused on making many vehicles and parts more accessible.

Table: Detailed GST Changes for Transportation Sector Goods (Automotive)

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 28% to 18%
4011	New pneumatic tyres, of rubber (other than for bicycles, cycle-rickshaws, three wheeled powered cycle rickshaws, rear tractor tyres, aircraft)	28%	18%
8701	Road tractors for semi-trailers of engine capacity more than 1800 cc	28%	18%
8702	Motor vehicles for the transport of ten or more persons, including the driver (other than buses for public transport exclusively running on Bio-fuels)	28%	18%
8703	Petrol, LPG or CNG driven motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm.	28%	18%
8703	Diesel driven motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm.	28%	18%
8702 or 8703	Motor vehicles cleared as ambulances duly fitted with all the fitments	28%	18%
8703	Three wheeled vehicles	28%	18%
8703 40, 8703 60	Motor vehicles with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion, of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm	28%	18%
8703 50, 8703 70	Motor vehicles with both compression-ignition internal combustion piston engine [diesel-or semi diesel] and electric motor as motors for propulsion, of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm	28%	18%
8704	Motor vehicles for the transport of goods (other than Refrigerated motor vehicles)	28%	18%
8706	Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705	28%	18%
8707	Bodies (including cabs), for the motor vehicles of headings 8701 to 8705	28%	18%
8708	Parts and accessories of the motor vehicles of headings 8701 to 8705 (other than specified parts of tractors, which are 5%)	28%	18%
8711	Motorcycles (incl. mopeds) and cycles fitted with an auxiliary motor, with or without side-cars, of an engine capacity not exceeding 350cc; side cars	28%	18%
8714	Parts and accessories of vehicles of heading 8711	28%	18%
8903	Rowing boats and canoes	28%	18%
9401 20 00	Seats of a kind used for motor vehicles	28%	18%
From 28% to 40% (De-Merit Rate)
8703	Motor cars and other motor vehicles principally designed for the transport of persons (excluding those listed above at 18%)	28%	40%
870340, 870360	Motor vehicles with spark-ignition engine and electric motor for propulsion, of engine capacity exceeding 1200cc or length exceeding 4000 mm	28%	40%
870350, 870370	Motor vehicles with compression-ignition engine and electric motor for propulsion, of engine capacity exceeding 1500cc or length exceeding 4000 mm	28%	40%
8711	Motor cycles of engine capacity exceeding 350 cc	28%	40%
8802	Aircraft for personal use.	28%	40%
8903	Yacht and other vessels for pleasure or sports	28%	40%

10. Building the Future: GST Changes for Cement & Construction Materials

The construction sector, a major employment generator, also sees a key input becoming more affordable.

Table: Detailed GST Changes for Construction Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 28% to 18%
2523	Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements	28%	18%
From 12% to 5%
68	Sand lime bricks or Stone inlay work	12%	5%

11. Weaving Growth: Correcting Inverted Duty Structures in Textiles & Fertilizers

Inverted duty structure (where GST on inputs is higher than on finished goods) has historically been a challenge for certain industries. The Council has acted to correct this, providing much-needed relief.

Table: Detailed GST Changes for Textile Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
5401	Sewing thread of manmade filaments	12%	5%
5402, 5403, 5404, 5405, 5406	Synthetic or artificial filament yarns	12%	5%
5508	Sewing thread of manmade staple fibres	12%	5%
5509, 5510, 5511	Yarn of manmade staple fibres	12%	5%
5601	Wadding of textile materials and articles thereof; absorbent cotton wool (except cigarette filter rods)	12%	5%
5602	Felt, whether or not impregnated, coated, covered or laminated	12%	5%
5603	Nonwovens, whether or not impregnated, coated, covered or laminated	12%	5%
5604	Rubber thread and cord, textile covered; textile yarn (impregnated, coated, covered or sheathed with rubber or plastics)	12%	5%
5605	Metallised yarn (other than real zari and imitation zari thread)	12%	5%
5606	Gimped yarn; chenille yarn; loop wale-yarn	12%	5%
5607	Twine, cordage, ropes and cables (other than jute twine, coir cordage or ropes)	12%	5%
5609	Articles of yarn, twine, cordage, rope or cables, not elsewhere specified or included	12%	5%
5701-5705	Carpets and other textile floor coverings (knotted, woven, tufted, felt, other); Mats and mattings (incl. Bath Mats, Cotton Rugs of Handloom)	12%	5%
5802-5805	Terry towelling, gauze, tulles, other net fabrics, lace, hand-woven tapestries	12%	5%
5807	Labels, badges and similar articles of textile materials	12%	5%
5808	Braids, ornamental trimmings, tassels, pompons (other than saree fall)	12%	5%
5809	Woven fabrics of metal thread and metallised yarn; Zari borders	12%	5%
5810	Embroidery in the piece, in strips or in motifs, Embroidered badges, motifs	12%	5%
5811	Quilted textile products in the piece	12%	5%
5901-5911	Coated textile fabrics (gum, amylaceous, plastic, rubber), linoleum, floor coverings, wall coverings, textile wicks, hose piping, transmission/conveyor belts, technical textile products/articles (e.g., card clothing, bolting cloth, paper maker's felt, gaskets)	12%	5%
6501	Textile caps	12%	5%
6505	Hats (knitted/crocheted) or made up from lace or other textile fabrics	12%	5%
9404	Products wholly made of quilted textile material not exceeding Rs. 2500 per piece	12%	5%
From 18% to 5%
5402, 5404, 5406	All Synthetic or artificial filament yarns	18%	5%
5403, 5405, 5406	All Synthetic or artificial filament yarns	18%	5%
5501, 5502	Synthetic or artificial filament tow	18%	5%
5503, 5504, 5506, 5507	Synthetic or artificial staple fibres	18%	5%
5505	Waste of manmade fibres	18%	5%
From 12% to 18% (Luxury Textiles)
61	Articles of apparel and clothing accessories, knitted or crocheted, of sale value exceeding Rs. 2500 per piece	12%	18%
62	Articles of apparel and clothing accessories, not knitted or crocheted, of sale value exceeding Rs. 2500 per piece	12%	18%
63 (other than 6309)	Other made up textile articles, sets of sale value exceeding Rs. 2500 per piece (other than Worn clothing and other worn articles; rags)	12%	18%
9404	Cotton quilts of sale value exceeding Rs. 2500 per piece	12%	18%
9404	Products wholly made of quilted textile material exceeding Rs. 2500 per piece	12%	18%
Value Change (No Rate Change) - 5%
61	Articles of apparel and clothing accessories, knitted or crocheted, of sale value not exceeding Rs. 2500 per piece	5%	5%
62	Articles of apparel and clothing accessories, not knitted or crocheted, of sale value not exceeding Rs. 2500 per piece	5%	5%
63 (other than 63053200, 63053300, 6309)	Other made up textile articles, sets of sale value not exceeding Rs. 2500 per piece	5%	5%
9404	Cotton quilts of sale value not exceeding Rs. 2500 per piece	5%	5%

12. Greener Future: Promoting Renewable Energy Devices

Aligning with India's commitment to sustainable energy, the Council has made renewable energy solutions more affordable.

Table: Detailed GST Changes for Renewable Energy Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
7321 or 8516	Solar cookers	12%	5%
8419 12	Solar water heater and system	12%	5%
84, 85 or 94	Following renewable energy devices and parts for their manufacture: Bio-gas plant; Solar power-based devices; Solar power generator; Wind mills, Wind Operated Electricity Generator (WOEG); Waste to energy plants / devices; Solar lantern / solar lamp; Ocean waves/tidal waves energy devices/plants; Photo voltaic cells	12%	5%
87	Fuel Cell Motor Vehicles including hydrogen vehicles based on fuel cell technology	12%	5%

13. Streamlining Travel & Logistics: GST Changes for Transportation Services

The Council has also made significant recommendations regarding transportation services, impacting air travel, goods transport, and vehicle renting.

Table: Detailed GST Changes for Transportation Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
From 12% to 18%
1	9964	Supply of Air transport of passengers in other than economy class	12% with ITC	18% with ITC
2	9964	Supply of Passenger transport by any motor vehicle where fuel cost is included	12% with ITC	18% with ITC
4	9965	Supply of transportation of natural gas, petroleum crude, motor spirit, high speed diesel or ATF through pipeline	12% with ITC	18% with ITC
5	9965	Supply of Transport of goods by GTA	12% with ITC	18% with ITC
6	9966	Supply of Renting of any motor vehicle (with operator) designed to carry passengers where the cost of fuel is included in consideration	12% with ITC	18% with ITC
From 12% to 5% (with/without ITC)
3	9965	Supply of transport of goods in containers by rail by any person other than Indian Railways	12% with ITC	5% without ITC
7	9966	Supply of Renting of goods carriage (with operator) where fuel cost is included in consideration	12% with ITC	5% with ITC of input services (in the same line of business)
8	9965	Supply of Multimodal transport of goods within India	12% with ITC	5%, where no leg of transport is through air, with restricted ITC
No Change (Maintaining 5% with/without ITC)
2	9964	Supply of Passenger transport by any motor vehicle where fuel cost is included	5% with ITC of input services (in the same line of business)	5% with ITC of input services (in the same line of business)
4	9965	Supply of transportation of natural gas, petroleum crude, motor spirit, high speed diesel or ATF through pipeline	5% without ITC	5% without ITC
5	9965	Supply of Transport of goods by GTA	5% without ITC (RCM/FCM)	5% without ITC (RCM/FCM)
6	9966	Supply of Renting of any motor vehicle (with operator) designed to carry passengers where the cost of fuel is included in consideration	5% with ITC of input services (in the same line of business)	5% with ITC of input services (in the same line of business)

14. Tourism & Well-being: GST Cuts for Hotel Accommodation & Wellness Services

The Council has also provided relief to the hospitality and wellness sectors, aiming to boost tourism and improve citizen well-being.

Table: Detailed GST Changes for Hotel & Wellness Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
From 12% to 5% (without ITC)
4	9996	Supply of “hotel accommodation” having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent	12% with ITC	5% without ITC
From 18% to 5% (without ITC)
7	9997	Beauty and physical well-being services falling under group 99972 (incl. gyms, salons, barbers, yoga centres)	18% with ITC	5% without ITC

15. Supporting Manufacturing: GST Changes for Job Work Services

Job work, an essential part of the manufacturing supply chain, also sees significant rate rationalization.

Table: Detailed GST Changes for Job Work Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
From 12% to 5% (with ITC)
1	9988	Supply of services by way of job work in relation to umbrella	12% with ITC	5% with ITC
2	9988	Supply of job work services or any treatment or process in relation to printing of all goods falling under Chapter 48 or 49, which attract GST @ 5%	12% with ITC	5% with ITC
3	9988	Supply of job work in relation to bricks which attract GST at the rate of 5%	12% with ITC	5% with ITC
4	9988	Supply of job-work services in relation goods falling under Chapter 30 (pharmaceutical products)	12% with ITC	5% with ITC
5	9988	Supply of job-work services in relation to Hides, skins and leather falling under Chapter 41	12% with ITC	5% with ITC
From 12% to 18% (with ITC)
6	9988	Supply of job-work not elsewhere covered (residual entry)	12% with ITC	18% with ITC

GST Changes for Construction Sector Services:

Table: Detailed GST Changes for Construction Sector Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
From 12% to 18% (with ITC)
1	9954	Composite supply of works contract and associated services, in respect of offshore works contract relating to oil and gas exploration and production in offshore area	12% with ITC	18% with ITC
2	9954	Composite supply of works contract involving predominantly earth work (more than 75% of value) provided to Government	12% with ITC	18% with ITC
3	9954	Composite supply of works contract provided by a sub-contractor to the main contractor (for services at Sl. No. 2 above)	12% with ITC	18% with ITC

16. The Rise of Hyperlocal: GST on Local Delivery Services

In a specific move relevant to the burgeoning hyperlocal delivery economy, the Council has clarified the GST treatment for local delivery services, especially those facilitated by Electronic Commerce Operators (ECOs).

Table: Detailed GST Changes for Local Delivery Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
No Change (Maintaining 18% with ITC)
1	9968	Local delivery services (currently taxed at 18% with ITC under SAC 996813 – Postal and Courier Services)	18% with ITC	18% with ITC (no change)
Clarification for ECO-facilitated Services (New Notification)
N/A	9968	Supply of local delivery services through Electronic Commerce Operator (ECO)	Not currently notified under section 9(5) of the CGST Act	Rate of GST at 18%. To be notified under section 9(5) of the CGST Act in cases where the person supplying such services through electronic commerce operator is not liable for registration under GST. Excluded from GTA services.

17. Miscellaneous Goods & Services: Other Noteworthy Changes

Beyond the major sectors, several other goods and services also see critical GST adjustments. This section covers a range of items from consumer electronics to defence imports and sports goods.

Consumer Electronics:

Table: Detailed GST Changes for Consumer Electronics Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 28% to 18%
8415	Air-conditioning machines	28%	18%
8422	Dish washing machines, household and other	28%	18%
8528	Television sets (including LCD and LED television); Monitors and projectors; reception apparatus for television, set top box	28%	18%

Sports Goods & Toys:

Table: Detailed GST Changes for Sports Goods & Toys

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
4203	Gloves specially designed for use in sports	12%	5%
9503	Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) (other than electronic toys)	12%	5%
9504	Playing cards, chess board, carom board and other board games, like ludo, etc. (other than Video game consoles and Machines)	12%	5%
9506	Sports goods other than articles and equipment for general physical exercise	12%	5%
9507	Fishing rods, and other line fishing tackle; fish landing nets, butterfly nets and similar nets; decoy “birds” and similar hunting/shooting requisites	12%	5%

Dutiable Articles for Personal Use (Imports):

Table: Detailed GST Changes for Dutiable Articles for Personal Use (Imports)

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 28% to 18%
9804	All dutiable articles intended for personal use	28%	18%

Wood Sector Goods:

Table: Detailed GST Changes for Wood Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
44 or any Chapter	Cement Bonded Particle Board; Jute Particle Board; Rice Husk Board; Glass-fibre Reinforced Gypsum Board (GRG); Sisal-fibre Boards; Bagasse Board; Cotton Stalk Particle Board; Particle/fibre board manufactured from agricultural crop residues	12%	5%
4404	Hoopwood; split poles; piles, pickets and stakes of wood; wooden sticks	12%	5%
4405	Wood wool; wood flour	12%	5%
4406	Railway or tramway sleepers (cross-ties) of wood	12%	5%
4408	Sheets for veneering; plywood; similar laminated wood; other wood (for match splints)	12%	5%
4409	Bamboo flooring	12%	5%
4415	Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood	12%	5%
4416	Casks, barrels, vats, tubs and other coopers’ products and parts thereof, of wood	12%	5%
4417	Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood	12%	5%
4418	Bamboo wood building joinery	12%	5%
4420	Wood marquetry and inlaid wood; caskets and cases for jewellery or cutlery, and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture not falling in Chapter 94	12%	5%
4421	Other articles of wood; such as clothes hangers, Spools, cops, bobbins, sewing thread reels, Match splints, Pencil slats, Parts of wood for ships/boats, Parts of domestic decorative articles used as tableware and kitchenware	12%	5%
4502 00 00	Natural cork, debacked or roughly squared, or in rectangular blocks, plates, sheets or strip	12%	5%
4503	Articles of natural cork such as Corks and Stoppers, Shuttlecock cork bottom	12%	5%
4504	Agglomerated cork (with or without a binding substance) and articles of agglomerated cork	12%	5%

Defence Sector Goods:

Table: Detailed GST Changes for Defence Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
8525 60	Two-way radio (Walkie talkie) used by defence, police and paramilitary forces etc	12%	5%
8710	Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons, and parts of such vehicles	12%	5%

Footwear Sector:

Table: Detailed GST Changes for Footwear Sector Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
64	Footwear of sale value not exceeding Rs.2500 per pair	12%	5%
Value Change (No Rate Change) - 18%
64	Footwear of sale value exceeding Rs.2500 per pair	18%	18%

Other Machinery & Miscellaneous Goods:

Table: Detailed GST Changes for Other Machinery & Miscellaneous Goods

Chapter / HSN	Description of Goods	Old GST Rate	New GST Rate
From 12% to 5%
01012100, 010129	Live horses	12%	5%
2515 12 10	Marble and travertine blocks	12%	5%
2516	Granite blocks	12%	5%
29061110	Natural menthol	12%	5%
29061110, 30, 3301	Menthol and menthol crystals, Peppermint (Mentha oil), Fractionated/de-terpinated mentha oil (DTMO), De-mentholised oil (DMO), Spearmint oil, Mentha piperita oil (from natural menthol)	12%	5%
3701	Photographic plates and film for x-ray for medical use	12%	5%
3705	Photographic plates and films, exposed and developed, other than cinematographic film	12%	5%
3706	Photographic plates and films, exposed and developed, whether or not incorporating sound track	12%	5%
3818	Silicon wafers	12%	5%
3926	Plastic beads	12%	5%
4007	Latex Rubber Thread	12%	5%
4016	Rubber bands	12%	5%
6602	Whips, riding-crops and the like	12%	5%
6909	Pots, jars and similar articles of ceramic for conveyance and packing of goods	12%	5%
7015 10	Glasses for corrective spectacles and flint buttons	12%	5%
7020	Globes for lamps and lanterns, Founts for kerosene wick lamps, Glass chimneys for lamps and lanterns	12%	5%
7310, 7323, 7612, or 7615	Milk cans made of Iron, Steel, or Aluminium	12%	5%
7317	Animal shoe nails	12%	5%
8306	Bells, gongs and the like, non-electric, of base metal; statuettes and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal; metal bidriware	12%	5%
8420	Hand operated rubber roller	12%	5%
9001	Contact lenses; Spectacle lenses	12%	5%
9003	Frames and mountings for spectacles, goggles or the like, and parts thereof	12%	5%
9404	Coir products (except coir mattresses)	12%	5%
9607	Slide fasteners and parts thereof	12%	5%
From 12% to 18%
29061190	Other than natural menthol	12%	18%
29061190, 30, 3301	Menthol and menthol crystals, Peppermint (Mentha oil), Fractionated/de-terpinated mentha oil (DTMO), De-mentholised oil (DMO), Spearmint oil, Mentha piperita oil (from other than natural menthol)	12%	18%
33074100	Odoriferous preparations which operate by burning (other than agarbattis, lobhan, dhoop batti, dhoop, sambhrani)	12%	18%
3826	Biodiesel (other than biodiesel supplied to Oil Marketing Companies for blending with High Speed Diesel)	12%	18%
Any Chapter	Goods for Petroleum operations (exploration, mining leases, NELP, MFP, CBM policies)	12%	18%
From 28% to 18% (Other Machinery)
8407	Spark-ignition reciprocating or rotary internal combustion piston engine (other than aircraft engines)	28%	18%
8408	Compression-ignition internal combustion piston engines (diesel or semi-diesel engines)	28%	18%
8409	Parts suitable for use solely or principally with the engines of heading 8407 or 8408	28%	18%
8413	Pumps for dispensing fuel or lubricants (filling stations/garages); Fuel, lubricating or cooling medium pumps for internal combustion piston engines	28%	18%
8507	Electric accumulators, including separators therefor (other than Lithium-ion battery and other Lithium-ion accumulators including Lithium-ion power banks)	28%	18%
8511	Electrical ignition or starting equipment; generators and cut-outs for internal combustion engines	28%	18%
From 12% to 5% (Other Machinery)
8401	Fuel elements (cartridges), non-irradiated, for nuclear reactors	12%	5%
From 28%/18% to 5% (Other Proposals)
8806	Unmanned aircrafts	28%/18%	5%
From 28% to 40% (De-Merit Rate)
9302	Revolvers and pistols (other than those of heading 9303 or 9304)	28%	40%
9614	Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof	28%	40%

IGST Exemptions (Imports):

Table: Detailed IGST Exemptions on Imported Goods (18% to NIL)

S.No.	Chapter / HSN	Description of Goods	Old IGST Rate	New IGST Rate
1	49	Technical documentation for exempted goods (notification No. 19/ 2019-Customs)	18%	NIL
2	71	Natural Cut and Polished Diamonds up to 25 cents (1/4 carats) imported under Diamond Imprest Authorization Scheme	18%	NIL
3	Any chapter	Works of art and antiques	18%	NIL
4	88, 8536	Flight Motion Simulator and its parts	18%	NIL
5	88, 8536	Target Motion Simulator and its parts	18%	NIL
6	Any chapter	Parts, sub-assemblies of HACFS (High Altitude Cold Fog Systems - assumed based on defence context)	18%	NIL
7	84, 85	Low noise amplifier (Hermetic sealed), vent guide assembly-Return, vent guide assembly-supply, vent guide assembly-NBC for MRSAM system	18%	NIL
8	84, 85, 87, 90, 93	Parts and sub-assemblies of IADWS (Integrated Air Defence Weapons System - assumed based on defence context)	18%	NIL
9	88	Military transport aircraft (C-130, C-295MW)	18%	NIL
10	89	Deep Submergence Rescue Vessel	18%	NIL
11	89	Unmanned Underwater vessels/platforms	18%	NIL
12	8807	Ejection Seats for fighter aircrafts	18%	NIL
13	8506	High performance batteries for drones and specialised equipment	18%	NIL
14	8525	Communication devices including software defined radios with component and accessories	18%	NIL
15	9019, 9020	Air diving, rebreather sets, diving systems, components and accessories	18%	NIL
16	89	Sonobuoys for naval air assets	18%	NIL
17	93	Ship launched missiles	18%	NIL
18	93	Rockets with calibre more than 100mm	18%	NIL
19	88	RPA (Remote Piloted Aircraft) for military use	18%	NIL
20	Any chapter	Parts, sub-assemblies, spares, accessories, tools, testing equipment, literature for goods like artillery weapons, rifles, aircrafts etc. (except for 12.7mm SRCG, 155mm/45 Cal. Dhanush, L-70 Gun, 84mm RL Mk-III, AK-630 Naval Gun, Light machine gun, MAG Gun)	18%	NIL

Other Services (General):

Table: Detailed GST Changes for Other Services

S.No.	HSN Code	Description of Service	Old GST Rate	New GST Rate
From 12% to 5% (with ITC)
1	9971	Supply of Service of third-party insurance of “goods carriage”	12% with ITC	5% with ITC
2	9996	Services by way of admission to exhibition of cinematograph films where price of admission ticket is one hundred rupees or less.	12% with ITC	5% with ITC
3	9994	Services by way of treatment of effluents by a Common Effluent Treatment Plant;	12% with ITC	5% with ITC
4	9994	Services by way of treatment or disposal of biomedical waste or the processes incidental thereto by a common bio-medical waste treatment facility to a clinical establishment.	12% with ITC	5% with ITC
From 12% to 18% (with ITC)
5	9983	Other professional, technical and business services relating to exploration, mining or drilling of petroleum crude or natural gas or both;	12% with ITC	18% with ITC
6	9986	Support services to exploration, mining or drilling of petroleum crude or natural gas or both.	12% with ITC	18% with ITC
From 28% to 40% (De-Merit Rate)
1	9996	Admission to casinos, race clubs, any place having casinos or race clubs, or sporting events like the IPL.	28% With ITC	40% with ITC
2	9996	Services by a race club for licensing of bookmakers in such club.	28% With ITC	40% with ITC
3	9973	Leasing or rental services, without operator, of goods which will attract 40% GST	28% With ITC	40% with ITC
4	Any chapter	Specified Actionable Claims (betting, casinos, gambling, horse racing, lottery, online money gaming) defined as goods	28% With ITC	40% with ITC

18. Streamlining Business: Key Procedural Reforms & Facilitation Measures

Beyond rate changes, the Council also recommended vital process reforms designed to make GST compliance simpler and smoother. These might seem less glamorous than rate cuts, but they are crucial for daily business operations.

a) Provisional Refunds for Exports & Inverted Duty Structure:

• Faster Refunds: For refunds arising from zero-rated supplies (exports or supplies to SEZ) and inverted duty structure (IDS), 90% of the claimed refund will be sanctioned provisionally based on system-based risk evaluation. This significantly improves cash flow for exporters and businesses facing IDS.
• Operational Date: These changes are expected to be operational from **November 1, 2025**.

b) GST Refunds for Low-Value Export Consignments:

• No More Threshold Limit: Section 54(14) of the CGST Act, 2017 will be amended to remove the threshold limit for refunds arising from exports made with tax payment.
• Benefit for Small Exporters: This is a big win for small exporters using courier or postal modes, making it easier for them to claim refunds on smaller consignments.

c) Simplified GST Registration Scheme for Small & Low-Risk Businesses:

• Automated Registration: An optional scheme where registration is granted automatically within three working days for low-risk applicants whose monthly output tax liability (on supplies to registered persons) does not exceed ₹2.5 lakh.
• Huge Benefit: This will benefit around 96% of new applicants, drastically simplifying the initial hurdle of GST registration.
• Operational Date: Expected from **November 1, 2025**.

d) Simplified Registration for Small Suppliers through E-commerce Operators (ECOs):

• Ease for Inter-State E-commerce: This in-principle approval aims to simplify GST registration for small suppliers making supplies through ECOs across multiple states. Currently, an unregistered supplier cannot make inter-state supplies, and maintaining a principal place of business in each state is challenging. The detailed modalities for operationalizing the said scheme will be placed before GST Council. It will ease compliance for such suppliers and facilitate their participation in e-commerce across States.

e) Place of Supply for Intermediary Services (Section 13(8) of IGST Act):

• Boost for Indian Exporters: Clause (b) of Section 13(8) of the IGST Act, 2017 will be omitted. This means the place of supply for "intermediary services" will now be the location of the recipient (as per Section 13(2)). This is a significant relief for Indian service exporters (e.g., IT, BPO, consulting) who provide services to overseas clients through intermediaries, allowing them to claim export benefits more easily.

f) Post-Sale Discount Clarity (Sections 15 & 34 of CGST Act):

• Simpler Discount Treatment: The requirement for discounts to be established in an agreement *before or at the time of supply* is being omitted. Discounts can now be granted through a credit note issued under section 34 of the CGST Act, and correspondingly, Input Tax Credit (ITC) reversal by the recipient will be streamlined. This removes a long-standing point of contention and simplifies how post-sale discounts are treated under GST.
• Clarity on Commercial Credit Notes: A circular will clarify issues like non-reversal of Input Tax Credit on account of post-sale discount through financial/commercial credit note; treatment of the post-sale discount provided by manufacturer to the dealer as additional consideration, in the transaction between dealer and end-customer; and treatment of post-sale discount as consideration in lieu of promotional activities etc. performed by the dealer. This aims to reduce ambiguity and disputes.

g) Retail Sale Price (RSP)-Based Valuation for Specific Goods:

• Simplified Valuation: GST will now be levied on the **Retail Sale Price (RSP)** instead of the transaction value for Pan Masala, Gutkha, Cigarettes, Unmanufactured tobacco, Chewing tobacco, and Zarda. This aims to simplify valuation and potentially increase revenue from these specific goods.

19. Faster Justice: Operationalization of the GST Appellate Tribunal (GSTAT)

A crucial institutional strengthening measure is the operationalization of the Goods and Services Tax Appellate Tribunal (GSTAT).

• Timeline: GSTAT will be operational for accepting appeals by the **end of September 2025** and commence hearings by the **end of December 2025**.
• Backlog Appeals: The Council also recommended the date of **June 30, 2026**, for the limitation of filing of backlog appeals.
• National Appellate Authority: The Principal Bench of GSTAT will also serve as the National Appellate Authority for Advance Ruling.

Impact on Your Side Business:

While we hope you never need it, GSTAT's operationalization means:

• Faster Dispute Resolution: A dedicated, specialized forum will handle GST disputes, leading to quicker decisions than traditional courts.
• Consistency: Ensures more consistent advance rulings and reduces varied interpretations of the law.
• Enhanced Trust & Ease of Doing Business: A robust dispute resolution mechanism fosters greater certainty and confidence for taxpayers.

20. Other Important Valuation & Clarification Changes

a) Clarification on Restaurant Services:

• 'Specified Premises' Definition: Explanations will be added to clarify that a stand-alone restaurant cannot declare itself a ‘specified premises’ and consequently cannot avail the option of paying GST at the rate of 18% with ITC. This aims to prevent misuse and ensure consistency, ensuring that restaurants either pay 5% GST without ITC (for most cases) or adhere strictly to the conditions for the 18% with ITC option if they truly qualify as part of larger specified premises like hotels.

b) Valuation Rules for Lottery Tickets:

• Alignment: The Council has recommended that valuation rules will be aligned with the change in the tax rate applicable to lottery tickets, and certain amendments in the GST Valuation rules are being carried out. While specific rate changes for lottery tickets are not detailed in the general goods tables, this indicates a clear framework for their valuation under the new regime.

c) Special Exemption: President's Secretariat Armoured Car:

• A unique decision was made to grant ad hoc **IGST and compensation cess exemption** on a new armoured sedan car imported by the President’s Secretariat for the President of India. This is a specific, high-level exemption for a matter of national security and protocol.

21. Phased Implementation: Understanding the Effective Dates

While the recommendations are sweeping, the Council has acknowledged the need for a phased implementation to ensure a smooth transition and manage the compensation cess account obligations. It's crucial for businesses to note these timelines:

• GST Rates on Services: Will be implemented with effect from **September 22, 2025**. This means service providers must adjust their invoicing and compliance systems well in advance.
• GST Rates on Most Goods: Will be implemented with effect from **September 22, 2025**. This applies to all goods *except* for certain tobacco and pan masala products. Businesses dealing in these goods must update their pricing and POS systems.
• Specific Tobacco Products & Pan Masala: Pan Masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco, and bidi will continue at existing rates (and compensation cess) until loan and interest payment obligations under the compensation cess account are fully discharged. The Union Finance Minister will decide the actual date of transition to the revised, higher rates (often 40% de-merit rate) for these goods. This means the higher rate for these items (like 40% for Pan Masala from 28%) is approved but deferred in its implementation.
• Process Reforms (e.g., provisional refunds, simplified registration): These vital administrative changes are expected to be operational from **November 1, 2025**. Businesses should prepare their internal processes to leverage these benefits.
• GSTAT Operationalization: The Goods and Services Tax Appellate Tribunal will start accepting appeals by the **end of September 2025**, and commence hearing cases before the **end of December 2025**.

Chart: Key Implementation Dates for GST 2.0 Reforms

(Image Placeholder: A clear timeline chart with markers for September 22, 2025, November 1, 2025, and end of 2025, detailing which reforms become effective on those dates. A separate box or note should highlight the deferred implementation for certain tobacco products.)

22. The Grand Impact: What These GST Reforms Mean for Your Side Business & Startup

This is where it all comes together. The 56th GST Council Meeting marks a pivotal moment for Indian entrepreneurship. Here’s a breakdown of the grand impact on your side business or startup:

Massive Opportunities & Relief:

• Cost Savings Everywhere: From daily essentials to healthcare, agricultural inputs, and construction materials, lower GST rates mean reduced costs for consumers and often for businesses. For your side business, this could mean lower operational expenses (if you consume these goods/services) or the ability to offer more competitive pricing for your offerings, potentially boosting sales volume.
• Simplified Compliance & Reduced Complexity: The monumental shift to a 2-rate structure (5% and 18%) drastically reduces the complexity of classifying goods and services. For small businesses and side hustlers, this is a game-changer, reducing the chances of errors, compliance burden, and the need for expensive expert consultations for basic classification. It helps free up your time to focus on growth, not paperwork.
• Boost for E-commerce & Small Sellers: The in-principle approval for simplified registration for small suppliers through ECOs (once fully detailed) is a golden ticket for micro-entrepreneurs to sell across states without immediate GSTIN hurdles. This expands their market reach exponentially, opening up national markets to even the smallest local businesses.
• Improved Liquidity for Exporters: Faster provisional refunds for exports and the removal of refund thresholds for low-value consignments will significantly improve cash flow for side hustles involved in international trade. This is vital for sustaining operations and reinvesting in growth.
• Empowerment for Artisans & Farmers: Targeted rate cuts for a vast array of handicrafts, agricultural machinery, and fertilizer inputs directly support these foundational sectors. This not only reduces costs but also encourages local production, potentially driving demand and increasing profitability for businesses within these value chains.
• Health & Well-being Sector Growth: Lower GST on life and health insurance, medicines, medical devices, and wellness services creates a more affordable ecosystem. This makes essential services more accessible to the common man, potentially increasing consumer spending and demand for quality products and services in these areas.
• Streamlined Job Work: The significant reduction in GST rates for various job work services (like textiles, printing, pharmaceuticals) will make manufacturing processes more cost-effective, benefiting the entire supply chain and encouraging domestic production.
• Faster Dispute Resolution: The operationalization of GSTAT provides a dedicated, specialized, and efficient forum for resolving GST disputes, reducing the long, cumbersome process through traditional courts. This offers greater certainty and predictability for businesses.

Key Areas for Vigilance & Adaptation:

• Implementing New Rates: You'll need to meticulously update your accounting systems, pricing, and invoicing for all goods and services affected by the rate changes. This requires careful attention to detail for a smooth transition from September 22, 2025.
• De-Merit Rate Impacts: If your side business is involved in the supply chain of goods or services falling under the 40% de-merit rate (e.g., high-end luxury items, certain betting/gaming services), you must critically re-evaluate your business model, pricing, and market strategy.
• Understanding Exemptions & ITC: While beneficial, ensure you correctly apply new exemptions. Remember, for services moving to 5% without ITC (like hotel accommodation below ₹7500, beauty/wellness services), you cannot claim Input Tax Credit on your purchases, which will need to be factored into your costing.
• Proactive Compliance: Even with simplification, staying updated on official notifications for procedural reforms (e.g., provisional refunds, simplified registration details) is critical to leverage them fully from November 1, 2025.
• Staying Agile: The GST landscape, though simplifying, remains dynamic. These reforms, while designed for simplicity, still require entrepreneurs to stay informed and adapt quickly. Treat this as an ongoing learning process.

The Big Picture: These reforms are a powerful signal of India's commitment to fostering a business-friendly environment that directly benefits the common citizen and empowers small businesses and startups to thrive in a simplified, transparent tax regime. This is about building a more robust, equitable, and competitive Indian economy, and your side hustle is a crucial part of that journey.

23. Your Future-Ready Action Plan: Navigating GST 2.0

Knowledge is power, but action is what truly transforms. Here’s a simple, actionable plan to keep your side hustle on the right track:

1. Deep Dive into Your Products/Services:
   • Identify Affected Items: Go through the detailed tables provided in this guide (and refer to the official PIB Annexures I-IV for precise HSN/SAC codes) and pinpoint every good or service you deal with that has a GST rate change (up, down, or NIL) or a new exemption.
   • Update Pricing: Adjust your pricing strategies based on new rates. Decide whether to pass on benefits to customers (to boost sales and consumer goodwill) or retain higher margins (if market conditions allow).
   • Review Supply Chain: Understand how changes in input costs (e.g., cement, manmade fibres, agri-machinery, auto parts) might affect your suppliers and, in turn, your own costs. Negotiate better terms if your suppliers are benefiting from lower GST on their inputs.
2. Prepare for Procedural Reforms:
   • E-commerce Strategy: If you're a small online seller, keep a close watch for the detailed modalities of the simplified ECO registration scheme. This could revolutionize your ability to sell nationally.
   • Refunds Readiness: If you export goods/services or operate under an inverted duty structure, prepare your documentation to avail the faster 90% provisional refunds from November 1, 2025. Streamlined cash flow can be a game-changer.
   • Simplified Registration: For new ventures or those considering formalizing, take advantage of the simplified 3-day registration for low-risk applicants from November 1, 2025. This significantly eases the initial hurdle.
   • Post-Sale Discounts: Update your discount policies and credit note issuance procedures to align with the new clarifications. Ensure your accounting team understands the revised treatment of financial/commercial credit notes to avoid future disputes.
3. Upgrade Your Systems:
   • Accounting Software: Ensure your accounting or ERP software is updated to reflect the new GST rates, the 2-rate structure, and new valuation methods (like RSP-based for tobacco products). Test these changes thoroughly.
   • Invoicing: Train your team to issue invoices with the correct GST rates and HSN/SAC codes from the effective dates. Accuracy is paramount.
   • POS Systems: For retail businesses, ensure your Point of Sale (POS) systems are updated to reflect the new rates on goods like daily essentials, food items, and consumer electronics.
4. Stay Educated & Consult Experts:
   • Continuous Learning: Make it a habit to check official announcements from the GST Council and PIB regularly. Subscribe to reliable tax news sources and, of course, keep following this blog for simplified, actionable updates!
   • Professional Advice: For complex scenarios, especially concerning specific industry impacts, valuation challenges, Input Tax Credit implications (especially for mixed supplies or where ITC is restricted), or any legal interpretation, always consult a qualified Chartered Accountant (CA) or GST practitioner. A small investment in expert advice can save you from big penalties and headaches later.
5. Leverage the Simplification: Don't just adapt; capitalize! A simpler, more predictable tax regime means you can spend less time on compliance and more time on innovating, marketing, serving your customers, and truly growing your side business. Use this newfound ease to expand your horizons.

24. Wrapping Up: Embracing the Future of GST in India

The 56th GST Council Meeting in September 2025 truly ushers in a new era for India's tax system. These "next-generation GST reforms" are a meticulously crafted package aimed at fostering affordability, simplifying business operations, and fueling economic growth from the grassroots. The shift to a streamlined 2-rate structure, the widespread exemptions and rate cuts on essential goods and services, and the procedural enhancements all point towards a more inclusive and efficient tax environment.

For you, the ambitious Indian entrepreneur, this is a moment to not just comply but to thrive. Embrace these changes, understand their nuances, and proactively adapt your business strategies. By doing so, you'll be well-positioned to leverage the benefits of GST 2.0, contributing to India's growth story while scaling your own side hustle to new heights. The future of doing business in India looks simpler, fairer, and full of exciting possibilities!

25. Let's Discuss & Grow Together!

Phew! That was an exhaustive deep dive into the future of GST in India! I hope this ultimate guide to the 56th GST Council Meeting has provided you with all the clarity and actionable insights you need regarding these groundbreaking recommendations.

Now, I want to hear from you!

• Which specific GST rate change or reform excites you the most for your side business, and why?
• Are there any aspects of these changes that you find particularly challenging or would like more clarification on?
• How do you think these "next-generation" reforms will impact the overall entrepreneurial landscape for small businesses and side hustles in India?

Share your thoughts, questions, and experiences in the comments section below. Let’s build a vibrant community of informed entrepreneurs, ready to tackle the future of business in India together. And if you found this guide valuable, please share it with fellow hustlers who need to stay in the loop!

Here's to a simplified, prosperous future! ✨

About the Author: Venugopal.G is the founder of Build Your Side Biz and a 25-year marketing veteran. After a long career launching products and building brands, his mission is now to empower aspiring entrepreneurs with the practical knowledge and confidence needed to succeed. Read his full story here.