The 56th GST Council Meeting, convened on September 03, 2025, has introduced a series of landmark reforms in India’s Goods and Services Tax framework. The revised structure focuses on reducing GST rates for essential items such as milk, paneer, butter, biscuits, medicines, agricultural equipment, and educational supplies, thereby offering tangible relief to households, farmers, and small businesses. Simultaneously, the Council has raised GST rates on tobacco products, pan masala, sugary beverages, luxury vehicles, and private aircraft to discourage unhealthy consumption patterns and ensure a fairer tax regime. These measures are expected to ease the financial burden on the common man, stimulate rural and agricultural growth, and enhance compliance while making luxury and sin goods more expensive.
Nirmala Sitharaman twitted on September 03, 2025, to announce Next-Gen GST Reforms for ease of living and to build Aatmanirbhar Bharat. The post stated: –
“From Farmers to enterprises, from households to businesses, the Next-Gen GST brings happiness for all”
The Changes will be effective from September 22, 2025. Let’s dive deep into the rate cuts along with procedural reforms of GST.
What Relief have been provided under GST Rate Cuts on September 03, 2025?
The 56th GST Council meeting brought major reliefs across essential sectors like food, textiles, health, construction, and services. Here’s a sector-wise breakdown of the GST rate cuts:
GST on Food Sector in 56th GST Council Meeting 2025
To make essential food items more affordable, GST rates on various dairy, bakery, and packaged goods have been slashed.GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| UHT Milk | 5% | Nil |
| Chena/Paneer (pre-packaged) | 5% | Nil |
| Pizza bread | 18% | Nil |
| Khakhra/Chapati/Roti | 18% | Nil |
| Paratha/Parotta | 12% | 5% |
| Condensed Milk | 12% | 5% |
| Butter, Ghee, Dairy Spreads | 12% | 5% |
| Cheese | 12% | 5% |
| Dry Fruits & Nuts (almonds, pistachios, etc.) | 12% | 5% |
GST on Textile & Apparel Sector in 56th GST Council Meeting
The 56th GST Council meeting also provided relief for the middle class through reduced GST on affordable garments and home textiles.GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| Apparel & clothing up to ₹2500 | 18% | 5% |
| Made-up textile articles (up to ₹2500) | 18% | 5% |
| Cotton Quilts (up to ₹2500) | 18% | 5% |
GST on Healthcare Sector in 56th GST Council Meeting
The 56th GST Council meeting also provided relief on Life-saving drugs and medical supplies which have been made cheaper with GST relief on September 03, 2025.GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| Individual Health and Life insurance | 18% | Nil |
| Thermometer | 18% | 5% |
| Medical Grade Oxygen | 12% | 5% |
| All diagnostic kits and reagents | 12% | 5% |
| Glucometer &Test Strips | 12% | 5% |
| Corrective Spectacles | 12% | 5% |
GST Rates on Education sector in 56th GST Council Meeting
The 56th GST Council meeting also provided relief to make learning tools and resources more accessible. Students and parents can now save more on basic supplies. This move is expected to reduce the cost of schooling and directly benefit millions of students across the country. GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| Maps, Charts & Globes | 12% | Nil |
| Pencils, Sharpeners, Crayons & Pastels | 12% | Nil |
| Exercise Books & Notebooks | 12% | Nil |
| Erasers | 12% | Nil |
GST Rates on Automobiles Made Affordable
The 56th GST Council meeting also provided relief to the automobile sectorwith GST rationalisation on hybrid vehicles, motorcycles, and goods transport vehicles.These cuts will make personal and commercial vehicles more affordable, boosting both household savings and the logistics sector.GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Item | From | To |
| Petrol & Petrol Hybrid Cars (≤1200cc, ≤4000mm) | 28% | 18% |
| Diesel & Diesel Hybrid Cars (≤1500cc, ≤4000mm) | 28% | 18% |
| Three-Wheeled Vehicles | 28% | 18% |
| Motorcycles (≤350cc) | 28% | 18% |
| Motor Vehicles for Transport of Goods | 28% | 18% |
GST on Uplifting Farmers & Agriculture in 56th GST Council Meeting
The 56th GST Council meeting also provided relief to farmers and the agriculture sectorwith reduced GST rates on tractors, agricultural machinery, and essential farm inputs.These reforms aim to lower input costs for farmers, encourage sustainable farming, and increase productivity in the agriculture sector. GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Item | From | To |
| Tractor Tyres & Parts | 18% | 5% |
| Tractors | 12% | 5% |
| Specified Bio-Pesticides & Micro-Nutrients | 12% | 5% |
| Drip Irrigation System & Sprinklers | 12% | 5% |
| Agricultural, Horticultural & Forestry Machines for Soil Preparation, Cultivation, Harvesting & Threshing | 12% | 5% |
GST on Job Work Sector in 56th GST Council Meeting
The 56th GST Council meeting also provided relief to small industries and MSMEs through lower GST on job work services. GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| Umbrella job work | 12% | 5% |
| Printing job work | 12% | 5% |
| Bricks job work | 12% | 5% |
| Pharma job work | 12% | 5% |
| Leather job work | 12% | 5% |
Other Services: – The 56th GST Council meeting also provided relief toother Key service sectors. GST Rate Cuts on September 03, 2025, were reformed as follows: –
| Relief Item | From | To |
| Hotel accommodation ≤ ₹7500/day | 12% | 5% (no ITC) |
| Film tickets ≤ ₹100 | 12% | 5% |
| Effluent & Biomedical Waste treatment | 12% | 5% |
| Third-party goods carriage insurance | 12% | 5% |
| Beauty & wellness service | 18% | 5% (without ITC) |
GST Rate Hikes 2025: What Just Got Costlier for Consumers?
While the 56th GST Council meeting on September 03, 2025, brought relief for many essential goods and services, not everything turned cheaper. Certain luxury, lifestyle, and sin goods saw higher GST rates, making them costlier for consumers. Here’s a quick look at what just became more expensive:
| Item | From | To |
| Pan Masala | 28% | 40% |
| Carbonated Beverages with Fruit Juice | 28% | 40% |
| Aerated Waters & Sweetened Beverages | 28% | 40% |
| Caffeinated Beverages | 28% | 40% |
| Cigars, Cigarillos & Cigarettes | 28% | 40% |
| Other Manufactured Tobacco (including reconstituted tobacco) | 28% | 40% |
| Tobacco Products for Inhalation (non-combustion) | 28% | 40% |
| Motorcycles above 350cc | 28% | 40% |
| Luxury Cars & SUVs (above threshold) | 28% | 40% |
| Yachts & Pleasure Vessels | 28% | 40% |
| Revolvers & Pistols | 28% | 40% |
| Aircraft for Personal Use | 28% | 40% |
The GST rate hikes are clearly targeted at luxury and sin goods, ensuring that affordability benefits are reserved for essentials while premium consumption bears a higher tax burden. This move aligns with the government’s intent to promote responsible consumption and generate additional revenue. However, it remains to be seen whether these hikes will discourage demand or simply make such products a symbol of higher spending power.
What are the Procedural Reforms Recommended in the 56th GST Council meeting on September 03, 2025, as a Measure for facilitation of trade?
1- Refund Reforms
- Sanction of risk-based provisional refund to facilitate refund claims on account ofzero-rated supply of goods or services or both (i.e. export of goods or services or both orsupply to a Special Economic Zone developer/unit for authorised operations.)
- Proposal for Risk-Based Provisional Sanction of refunds arising out of invertedduty structure (IDS)
- Amendment in CGST Act to provide for GST Refunds in respect of low valueexport consignments
2- Registration reforms
- Simplified GST Registration Scheme for Small and Low-Risk Businesses:
- Introduction of Simplified Registration Scheme for small suppliers supplying through electronic commerce operators.
GST Provisions Reforms
- Amendment in place of supply provisions for intermediary services under section13(8) of the IGST Act:
- Amendment of section 15 and section 34 of CGST Act, 2017 in respect of Post Sale Discount:
- Issuance of circular on certain issues pertaining to Post Sale Discount
The above procedural reforms were recommended in the 56th GST Council meeting and these will be notified in due course after amendments. It will be important to observe how effectively these changes are implemented and whether they truly deliver on the promise of enhancing transparency and ease of doing business under GST.
Conclusion
The GST rate cuts announced in the 56th GST Council meeting on September 03, 2025, promise relief across essential goods and services, from milk and paneer to medicines, textiles, and transport. These reforms are designed to ease the burden on households and support small businesses, but the real impact will only be visible in the coming months. It will be interesting to see whether the benefits actually reach the middle class in the form of reduced prices or simply increase the profit margins of big corporates. In either case, the GST rate cuts on September 3, 2025, represent an important turning point in India’s indirect tax framework.
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