56th GST Council Meeting Highlights: Updates, Outcome, Press Release and Latest News

Updated on: Sep 18th, 2025

16 min read

The 56th GST Council meeting happened on 3rd September 2025 at New Delhi. The GST Council has met after six months to discuss the long-pending agenda items. Significant decisions were taken in line with the government's vision for implementing next-gen GST reforms- GST Council has approved the two-tier GST rate structure of 5% and 18%, removing the 12% and 28% slabs.

Accordingly, the CBIC has issued notifications on 17th September 2025, notifying all the GST rate changes, exemptions and amendments to CGST Rules. Most of the GST rate changes and new rules apply from 22nd September 2025.

Let’s explore the 56th GST Council meeting highlights in this article.

Key Takeaways
56th GST Council meeting happened on 3rd September 2025 at New Delhi.
15 August 2025- On the 79th Independence Day, 15th August 2025, Prime Minister Narendra Modi announced the implementation of Next-Generation GST reforms.
Changes are notified on 17th September 2025 vide CGST notifications 09/2025-CTR to 17/2025-CTR and 13/2025-Central Tax and 14/2025-Central Tax.
The GST Council approved the Next gen GST reforms removing 12% and 28% tax slabs, while merging items into the 5% or 18% tax slabs, introduced a 40% tax slab for demerit goods, corrected the inverted tax structure on fertilizers, fabrics and more. The GST rate changes will come into effect from 22nd September 2025, except for GST rate change on tobacco and tobacco products.
The agenda also has aspects such as introducing pre-filled returns and automated GST refunds, which might be discussed on 4th September 2025.

56th GST Council Meeting

Notifications for the 56th GST Council Meeting

Central Tax Notifications

Notification

Description

Summary

13/2025- Central Tax

Central Goods and Services Tax (Third Amendment) Rules, 2025

• Rule 31A(2): Valuation factor changed by substituting 128 with 140 (impacts value of supply of lottery).

• Rule 39(1A): Clarifies reverse charge references to CGST Act section 9 and IGST Act section 5(3) and 5(4), effective 1st April 2025.

• Rule 91(2): Provisional refund order in FORM GST RFD-04 within 7 days based on risk; officer may skip provisional refund and proceed under rule 92; no revalidation of RFD-04; effective 1st October 2025.

• Appeals: CGST Rule 110 updated to use new FORM GST APL-02A; new rule 110A enables single-member bench transfers where no question of law; ties to section 109(8) threshold of INR 50 lakh; rule 111 aligned; rule 113(2) introduces summary order FORM GST APL-04A;

• Annual return changes (GSTR-9): New ITC rows (A1, A2, H1, etc.), clearer placement of reclaimed ITC with references to CGST Rules 37, 37A, 38, 39, 42, 43; revised Part V timing notes for FY 2024-25 onward, applicable from date of notifying in official gazatte.

• Reconciliation statement (GSTR-9C): adds fields for supplies covered by section 9(5) of CGST Act; late fee reference aligned to section 47(2); clarifies “payable” vs “paid”, applicable from date of notifying in official gazatte.

• Commencement: Applicable from 22nd September 2025 for all except, unless otherwise stated.

14/2025- Central Tax

Persons not eligible for provisional refund under section 54(6) of CGST Act

• Provisional refund not allowed under section 54(6) to:

1) any registered person without Aadhaar authentication per rule 10B;

2) persons supplying specified goods: areca nuts (0802 80), pan masala (2106 90 20), tobacco and manufactured tobacco substitutes (Chapter 24), and essential oils (3301).

• Effective from 1st October 2025.

Central Tax Rate Notifications

Notification	Description	Summary
09/2025-CT rate	Revised tax rates and schedules	Supersedes 01/2017-CTR to notify GST rates on various goods by detailed schedules. This includes major slab restructuring and new product/sector coverage. Schedule I (5%): Essential goods (food grains, dairy, pulses, spices, medicines, renewable energy) Schedule II (18%): Processed foods, spirits, cement, ores, sports goods, toys, art, manufactured products Schedule III (40%): Soft drinks, luxury vehicles, yachts, aircraft, gambling Schedule IV (3%): Gold/precious metal jewellery, silver coins, handcrafted idols, platinum products, semi-processed gems, handicrafts Schedule V (0.25%) & Schedule VI (1.5%): Rough diamonds, industrial diamonds, uncut gemstones Schedule VII (28%): Pan masala, Tobacco, cigarettes These changes are to be effective from 22nd September 2025
10/2025-CT rate	Revised exemption list for goods	Supersedes 02/2017-CTR to update the list of goods exempt from central GST, expands exemptions especially for agricultural, food, health, and education items. Also, defines terms such as ‘pre-packaged and labelled’, “unit container” and clarifies the scope of items such as the drugs in Annexure I & musical instruments in Annexure II. This notification is to be effective from 22nd September 2025
11/2025-CT rate	GST rate amendment for petroleum and coal bed methane operations	The rate is changed from the earlier 12% to 18%. This amendment will be effective from 22nd September 2025.
12/2025-CT rate	Amendment to used motor vehicles	The notification chnages the reference for used motor vehicles (pertol/ deisel/ SUVs) from the older schedule (Schedule IV of 01/2017) to the updated schedules (Schedule II or III of 09/2025). This notification is to be effective from 22nd September 2025
13/2025-CT rate	Reduced GST rate on handmade items and handicrafts, etc.	Substitutes the previous notification 21/2018-CTR. It replaces the entire GST rate table. The new rates prescribed are 5% GST for a wide array of handicraft items including woodcraft, embroidery, coir, pottery, glassware, bamboo and cane crafts, paintings, sculptures, etc. Additionally, silver filigree work, handmade imitation jewellery and natural seed/bead jewellery attract a concessional rate of 3%. This notification is effective from 22nd September 2025.
14/2025-CT rate	GST rate notified for bricks/tiles	Notifies GST at 12% for fly ash bricks, building bricks, fossil bricks, earthen/roofing tiles; clarifies product codes and coverage. This notification is effective from 22nd September 2025.
15/2025-CT rate	Comprehensive service rate changes	Amends the GST rates on various services under the principal Notification 11/2017-CTR, as follows- 1) New rate 18%- Transport services (non-Indian railways container transport, multimodal transport), courier and postal services, local delivery through e-commerce operators, professional and business services, manufacturing job work. (Previously 12% GST). 2) New rate 5%- Tailoring services, job work for food, textiles, printing educational materials, brick manufacturing, handicrafts, beauty and cleaning services. 3) New rate 1.5%- Job work on diamonds. Tightened rules on input tax credit claims with clear exceptions and illustrations. This notification is effective from 22nd September 2025 It is also clarified with respect to renting, that ‘premises’ means a place from where hotel accommodation services are being supplied or are to be supplied, with effect from 1st April 2025.
16/2025-CT rate	Exemptions to services- Removal of Local delivery by or through ECO & including individual health/life insurance	- Amends the definition of GTA given under the principal Notification 12/2017-CTR to exclude local delivery by or through ECO (e-commerce operator) - Inserts exemptions for individual health/life insurance & reinsurance - Clarifies that certain local delivery by or through e-commerce operator are excluded from certain exemptions - Defines ‘group’ and ‘health insurance business’. - This notification is effective from 22nd September 2025
17/2025-CT rate	Reverse charge on local delivery service by ECO	Adds a clause in the principal notification 17/2017-CTR, specifies that the e-commerce operator shall pay GST under RCM on services by way of local delivery except where the person supplying such services through the electronic commerce operator is liable for mandatory GST registration under section 22(1) This notification is effective from 22nd September 2025

Highlights from the 56th GST Council Meeting

FM quoted, "These reforms have been carried out with a focus on the common man. Every tax on the common man's daily use items has gone through a rigorous review, and in most cases, the rates have come down drastically."
The GST Council approved exempting GST on life and health insurance.
Tobacco and its products will continue to be charged at the existing 28% rate until compensation liability, like loan and interest thereon, is discharged.
The rest of the GST rate changes on goods and services (except for tobacco and its products) will come into effect from 22nd September 2025.
Simplification of GST registration process:
The GST Council recommended moving towards two-tier GST rate structure (18% standard and 5% merit), and a special 40% demerit rate on select products.
Secretary confirmed during the media briefing that there is no change recommended for the monthly GST return filing.
The Goods and Services Tax Appellate Tribunal (GSTAT) will be made operational in 2025. The Principal Bench of the GSTAT will also serve as the National Appellate Authority for Advance Ruling. Deadlines given below-
1. Accepting appeals before 30th September 2025
2. Commence hearing before 31st December 2025
3. Limitation date for filing of backlog appeals- 30th June 2026
From 1st November 2025, CBIC will implement the revised system for granting 90% provisional refunds on account of the inverted duty structure and zero-rated supplies of goods and services. It will be based on a system-run data analysis and risk evaluation.
The GST Council recommended removing the threshold limit for refunds arising from exports made with payment of tax, thereby easing the compliance burden for exporters who send goods through the post and courier.
CGST Sections 15 and 34 are amended. It removed the provision for establishing the discount in terms of an agreement entered into before or at the time of such supply and specifically linking of the same with relevant invoices. Further, both provisions are amended to provide for reversal of input tax credit by the recipient in case where a post-sale discount is given and the value of supply is reduced through a GST credit note by supplier. A GST Circular will be issued in due course.
Going forward, the place of supply for intermediary services will be in line with the default rule under the IGST Section 13(2). It shall be the location of the recipient of such services. Accordingly, Indian exporters can claim export benefits.
The GST Council approved a scheme for small suppliers supplying through electronic commerce operators for a simplified GST registration.
The GST Council also recommended retail sale price-based valuation instead of transaction value for tobacco and its products.

GST Rate Cuts:

Category	Items	From (%)	To (%)
Daily Essentials	Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, Shaving Cream	18	5
	Butter, Ghee, Cheese & Dairy Spreads	12	5
	Pre-packaged Namkeens, Bhujia & Mixtures	12	5
	Utensils	12	5
	Feeding Bottles, Napkins for Babies & Clinical Diapers	12	5
	Sewing Machines & Parts	12	5
Uplifting Farmers & Agriculture	Tractor tyres & parts	18	5
	Small tractors (capacity < 1800 cc)	12	5
	Specified 12 bio-Pesticides and micro-Nutrients	12	5
	Drip Irrigation System & Sprinklers	12	5
	Agricultural, Horticultural or Forestry Machines (Soil Preparation, Cultivation, etc.)	12	5
Healthcare Sector	Individual Health & Life Insurance	18	Exempted
	Thermometer	18	5
	Medical Grade Oxygen	12	5
	All Diagnostic Kits & Reagents	12	5
	Glucometer & Test Strips	12	5
	Corrective Spectacles	12	5
	33 drugs and medicines, listed in the press release	12	Nil
	Agalsidase Beta, Imiglucerase and Eptacog alfa activated recombinant coagulation factor VIIa drugs	5	Nil
	Drugs and medicines such as Faricimab, Pertuzumab, Fluticasone Furoate + Umeclidinium + Vilanterol FF/UMEC/VI, Ocrelizumab, and Brentuximab Vedotin	12	5
Automobiles	Petrol & Petrol Hybrid, LPG, CNG Cars (≤1200cc & ≤4000mm)	28	18
	Diesel & Diesel Hybrid Cars (≤1500cc & ≤4000mm)	28	18
	Three wheelers	28	18
	Motorcycles (≤350cc)	28	18
	Motor Vehicles for the transport of goods	28	18
Education	Maps, Charts & Globes	12	Nil
	Pencils, Sharpeners, Crayons & Pastels	12	Nil
	Exercise Books & Notebooks	12	Nil
	Eraser	5	Nil
Electronic Appliances	Air Conditioners	28	18
	Television (including LED & LCD TVs)	28	18
	Monitors & Projectors	28	18
	Dish Washing Machines	28	18

GST Rate Hikes:

Category	Item description	From (%)	To (%)
Mining	Coal, lignite, peat	5	18
Sin goods	Tobacco/pan masala*	28	40
	Aerated waters	28	40
	Caffeinated beverages	28	40
	Carbonated beverages of fruit drinks / with fruit juice	28	40
	Other non‑alcoholic beverages	18	40
	Motor cars and larger hybrids (beyond small‑car thresholds)	28	40
	Motorcycles exceeding 350cc	28	40
	Aircraft for personal use	28	40
	Yachts and vessels for pleasure/sports	28	40
	Smoking pipes and cigarette/cigar holders	28	40
	Revolvers & pistols	28	40
	Admission to casinos, race clubs, and sporting events like IPL	28% with ITC	40% with ITC
	Licensing of bookmakers by race clubs	28% with ITC	40% with ITC
	Specified actionable claims (betting, casinos, gambling, horse racing, lottery, online money gaming)	28% with ITC	40% with ITC
	Leasing/rental without operator of goods attracting 40% GST	28% with ITC	40% with ITC
Paper sector	Dissolving‑grade chemical wood pulp	12	18
Paper sector	Various papers/paperboards, other than exercise‑book paper	12	18
Textiles	Apparel/Made‑ups > Rs 2,500 per piece	12	18
Textiles	Quilted/cotton quilts and quilted products more than Rs.2,500 per piece	12	18

* Effective from 22nd Sept, 2025 vide CGST-rate notfifications 09/2025 to 17/2025 dated 17th September 2025.

Expectations from 56th GST Council Meeting

GST Rate Rationalisation

A much-needed move from the GST Council expected at the 56th GST Council meeting is restructuring and rationalising the GST rate structure. The Group of Ministers (GoM) for rate rationalisation, along with the fitment committee, had delayed the submission of its report at the 55th GST Council meeting held in December 2024.

In February 2025, Sanjay Agarwal, chairman of the Central Board of Indirect Taxes and Customs (CBIC), mentioned that socio-economic and revenue factors had made the GST rate rationalisation task challenging for the Group of Ministers and the fitment committee. He further stressed that the GoM must reach a consensus on the recommendations for GST rate rationalisation.

Media reports suggest that GoM hahas approved the Centre's decision to shift items in 12% and 28% GST rate slab may be shifted to either the 5% or the 18% slabs.ntroduction of 40% GST slab for sin goods is also being contemplated. The GST Council may pass the final recommendation.

There are speculations that the GoM will also recommend removing the inverted tax structure prevalent across industries such as textiles, footwear, fertilisers, paper and packaging. The GST Council is likely to recommend a phased approach for GST rate rationalisation, such that the rule change allows taxpayers enough time to implement GST rate changes while avoiding any potential anti-profiteering issues.

Review of Compensation Cess

The GST Council may decide whether to extend or end the levy, collection, and distribution of compensation cess to States. Currently, the GST Council has to repay the back-to-back loans to meet the shortfall in GST Compensation. Media reports indicate that the GST Council might replace compensation cess with health and clean energy cess after March 2026. If the change were to come into force, it needs constitutional amendment.

Levy and collection of compensation cess was extended up to 31st March 2026. A GoM is formed to study the possibility of a new tax levy to replace the compensation cess after it ends. The GoM is headed by the Minister of State in the Finance Ministry, Pankaj Chaudhry and is slated to submit their report by 30th June 2025.

GST Rate Changes

Taxation of certain items under GST is still being contemplated. One such item is the GST on health insurance. The GST Council at its 55th meeting provided a timeline extension for the GoM to study GST on insurance premia. The taxation of health insurance and life insurance under GST could be deliberated at the 56th GST Council meeting. An 18% GST rate is currently charged on insurance premia, which is proposed for an exemption.

There is speculation that the 56th GST Council may unify the GST levy on commercial drones. The Council may recommend reducing the GST rate on drones from 28% to 5%. Also, taxation of GST on drones with detachable cameras has been a significant point of contention.

The move will clarify the classification of goods in the Unmanned Aircraft System (UAS). A higher rate of 28% is levied for the personal use of drones, whereas a lower rate of 5% is charged for business use under the HSN code 8806. The tax authorities have mostly charged 18% GST on these drones by classifying them as camera equipment instead of aircraft. Industry experts claim that drones must be categorised based on their main operation, airborne mobility rather than additional accessories.

The Council may also consider GoM submissions on charging GST on virtual digital assets, the practical implementation of CGST Section 11A (to waive recovery of GST not levied or short-levied due to common trade practices in specific sectors), and sector-specific clarifications for e-commerce, real estate, and gaming.

The 56th GST Council meeting is crucial for many industries as some of the long-standing issues may find closure.

Press Release of 56th GST Council Meeting

Download the complete press release issued by the Finance Ministry after the conclusion of the press conference on 3rd September 2025.

Download Press Release PDF

Frequently Asked Questions

When and where is the 56th GST Council meeting being held?

The 56th GST Council meeting is being conducted on 3rd and 4th September 2025 (Wednesday and Thursday) at New Delhi.

What is the 56th GST Council meeting?

56th GST Council meeting is the meeting, held after six months since the last one, by the Union Finance Minister with the State/UT Finance Ministers/representatives to deliberate on key issues in GST and make recommendations around new-gen GST reforms- including rate rationalisation, pre-filled GST returns and automated GST refunds.

What are the key topics on the agenda?

Key topics on 56th GST Council meeting agenda are possible GST rate rationalisation, compliance simplification, and resolution of sector-specific GST anomalies.

Are there any other reforms under discussion?

Other reforms under discussion reportedly include digital invoicing updates, measures for curbing evasion, and further clarification on GST for online gaming.

What are the expected benefits of this rate overhaul?

The expected benefits of the rate overhaul at the 56th GST Council meeting include reduced GST classification disputes, a simpler GST rate structure, and improved ease of doing business.

Where is the 55th GST Council held?

55th GST Council meeting was held in Jaisalmer, Rajasthan on 21st December 2024.

How many GST Council meetings have been held till now?

55 GST Council meetings have been held till now (August 2025). 56th GST Council meeting is upcoming on 3rd and 4th September 2025.

What are the changes in the 55th GST Council meeting?

55th GST Council meeting recommended rate rationalisation with several rate cuts, clarifications and exemptions on goods and services. Furthermore, it also recommended amendment in CGST Act and Rules, 2017 in respect of functionality of Invoice Management System (IMS), Input Service Distributors (ISD), pre-deposit for filing an appeal.

About the Author

Annapoorna

Assistant Manager - Content

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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