Tarun Karthick
Sri Vijaya Puram, 25 September 2025
In line with the 56th GST Council Meeting, significant changes to the Goods and Services Tax (GST) have come into effect across India from 22nd September 2025. The reforms aim to simplify the tax structure, make essential goods and services more affordable, and provide relief to common citizens.
Key highlights of the GST changes include:
- Exemptions on Insurance Policies: GST is now exempt on all individual life insurance policies—including term life, ULIP, and endowment policies—and on all individual health insurance policies, including family floater and senior citizen plans. The move is aimed at making insurance more accessible and increasing coverage.
- Simplified Tax Structure: The existing 4-tier GST rate has been rationalised into a two-rate system: a Standard Rate of 18% and a Merit Rate of 5%, with a special de-merit rate of 40% applicable to select goods and services.
- Reductions on Everyday Goods: GST has been reduced from 18% or 12% to 5% on essential items such as hair oil, soaps, shampoos, toothpaste, toothbrushes, bicycles, tableware, and other household articles. Ultra-High Temperature (UHT) milk, pre-packaged chena/paneer, and all Indian breads—including chapati, roti, paratha, and parotta—now attract NIL GST.
- Food Items and Beverages: Packaged snacks, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, and ghee will see GST reduced from 12% or 18% to 5%.
- Automobiles and Machinery: GST on small cars, motorcycles up to 350cc, air-conditioning machines, TVs up to 32 inches, dishwashers, buses, trucks, and ambulances has been reduced from 28% to 18%. Three-wheelers and auto parts now attract a uniform 18% GST.
- Agricultural and Labour-Intensive Goods: GST on tractors, farming machinery, handicrafts, marble and granite blocks, and intermediate leather goods has been reduced from 12% to 5%.
- Medicines and Medical Devices: Thirty-three lifesaving drugs and medicines are now GST-free, while other critical medicines see rates reduced from 12% to 5%. GST on medical apparatus and supplies—including diagnostic kits, wadding gauze, bandages, and glucometers—has also been reduced to 5%.
- Other Services: GST on hotel accommodation costing up to Rs. 7,500 per unit per day, beauty and physical well-being services—including gyms, salons, barbers, and yoga centres—has been reduced to 5%.
- Textiles, Fertilisers, and Renewable Energy: GST on manmade fibre and yarn has been reduced to 5%, correcting long-pending inverted duty structures. Fertilisers such as sulphuric acid, nitric acid, and ammonia now attract 5% GST, along with renewable energy devices and parts.
Authorities have directed all businesses in the Union Territory to adhere to the revised rates from 22nd September 2025. Citizens or business owners who wish to lodge grievances regarding non-compliance or seek clarifications can contact the GST helpline on WhatsApp number 9595359698.
