The 56th GST Council Meeting, held on 3rd September 2025 at Sushma Swaraj Bhavan, New Delhi under the chairpersonship of Union Finance Minister Nirmala Sitharaman, introduced significant GST reforms aimed at simplifying tax rates and easing compliance. The Council recommended major changes in GST slabs, offered relief measures for the common man and middle class, and announced trade facilitation steps to boost business efficiency. In addition, FAQs were released to address queries and provide clarity on the new GST rules.

56th GST Council Meeting 2025: Key Reforms, GST Rate Changes, and Tax Reliefs

A) CHANGES IN GST RATES OF GOODS AND SERVICES

I ) Recommendations Relating to GST Rates on Goods

• HSN wise and sector wise GST rate changes have been notified (Annexure I & II).
• Pan Masala, Gutkha, Cigarettes, Unmanufactured Tobacco, and Chewing Tobacco (Zarda) – GST will now be levied on the Retail Sale Price (RSP) instead of the transaction value.
• Import of Armoured Sedan Car for the President of India – granted ad hoc IGST and compensation cess exemption for the President’s Secretariat.

II ) Recommendations Relating to GST Rates on Services

• HSN wise and sector wise GST rate changes have been notified (Annexure III & IV).
• Restaurant Services Clarification – An explanation has been added to the definition of specified premises to clarify that stand alone restaurants cannot declare themselves as specified premises and therefore cannot opt to pay GST at 18% with ITC.
• Lottery Services – Valuation rules have been aligned with the revised GST rate applicable to lottery.

III ) Recommendation Relating to Date of Implementation

• The changes in GST rates of goods and services will be implemented in a phased manner starting 22nd September 2025.
• Services – All GST rate changes on services will come into effect from 22nd September 2025.
• Goods (except tobacco related products) – GST rate changes on all goods, except pan masala, gutkha, cigarettes, chewing tobacco (Zarda), unmanufactured tobacco, and bidi, will also apply from 22nd September 2025.
• Tobacco and related products – These items will continue at existing GST and compensation cess rates until the loan and interest obligations under the compensation cess account are fully discharged.
• Transition decision – The Union Finance Minister and GST Council Chairperson will announce the actual transition date for tobacco and related products once obligations are cleared.
• Provisional refunds system – Pending amendments in the CGST Act, 2017, the CBIC will administratively implement the revised system of granting 90% provisional refunds under the inverted duty structure, based on data analysis and risk evaluation (similar to zero-rated supply refunds).

B) Measures for Facilitation of Trade

• Process Reforms – The GST Council has recommended several process reforms and improvements in GST law and procedures (detailed in Annexure V). The exact date of implementation will be notified separately.
• Operationalization of GST Appellate Tribunal (GSTAT) – The GSTAT will become operational for accepting appeals before the end of September 2025, with hearings expected to commence by December 2025.
• Backlog Appeals Timeline – The Council has set 30th June 2026 as the deadline for filing backlog appeals.
• Strengthening Institutional Framework – The Principal Bench of GSTAT will also function as the National Appellate Authority for Advance Ruling, ensuring uniformity, consistency in rulings, and quicker dispute resolution.
• Ease of Doing Business – These measures aim to enhance taxpayer confidence, transparency, and ease of compliance, thereby making GST more business friendly.

Annexure I – HSN wise GST Rate Changes on Goods

This annexure details the revised GST rates on goods across various HSN codes. It provides clarity on product-wise tax adjustments for businesses and traders.

Annexure II – Sector wise GST Rate Changes on Goods

Covers GST rate revisions specific to different industry sectors, highlighting which goods have become cheaper or costlier after the 56th Council meeting.

Annexure III – HSN wise GST Rate Changes on Services

Presents a detailed list of service categories with updated GST rates, ensuring transparency and easier compliance for service providers.

Annexure IV – Sector wise GST Rate Changes on Services

Outlines service sector-specific GST changes, enabling stakeholders to understand the impact on industries like hospitality, healthcare, and entertainment.

Annexure V – Process Reforms and Trade Facilitation Measures

Provides a summary of reforms in GST law and procedures, including simplification of compliance, dispute resolution, and trade facilitation initiatives.