The GST Council has approved in-principle, the concept of a simplified GST registration mechanism for small suppliers making supplies through e-commerce operators (ECOs) across multiple States facing challenges in maintaining principal place of business in each State as currently required under the GST framework. 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. (Source: PIB)

In order to simplify the registration process, the GST Council has recommended the introduction of an optional simplified GST registration scheme wherein registration shall be granted on an automated basis within three working days from the date of submission of application in case of low risk applicants and applicants who based on their own assessment, determine that their output tax liability on supplies to registered persons will not exceed ₹2.5 lakh per month (inclusive of CGST, SGST/UTGST and IGST). The scheme will provide for voluntary opting into and withdrawal from the scheme.

The special rate is applicable only on few select goods, predominantly on sin goods and few luxury goods and therefore is a special rate. Most of these goods attracted Compensation Cess in addition to GST. Since it has been decided to end the Compensation Cess levy, the Compensation Cess rate is being merged with GST so as to maintain tax incidence on most goods. On other goods and services, the special rate has been applied as these were already attracting the highest GST rate of 28%. (Source: PIB)

If drugs/ medicines are fully exempted, the manufacturers/dealers would not be able to claim input tax credit on GST paid on raw materials and will have to reverse the ITC paid on the inputs. This would increase their effective tax incidence and cost of production. This may in turn be passed on to consumers/ patients in the form of higher prices which in turn would make the measure counterproductive. (Source: PIB)

All drugs/ medicines have been prescribed a concessional rate of GST of 5%, except those specified at nil rate.

Prior to rate rationalisation, paneer sold in other than pre-packaged and labelled form already attracted nil rate. Therefore the changes have been made only in respect of paneer supplied in pre-packaged and labelled form. Paneer is an Indian cottage cheese. This is mostly produced in small-scale sector. The measure is intended to promote Indian cottage cheese. (PIB)

The principle behind the recent rate rationalisation exercise is to keep similar goods at the same rate to avoid issues of misclassification and disputes. This has also been applied to ‘other non- alcoholic beverages’. (PIB)

The said issue has been clarified vide circular No. 135/05/2020-GST dated 31.03.2020 (as amended), which states that refund of accumulated ITC in terms of clause (ii) of first proviso to section 54(3) of the CGST Act, is available where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. However, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act. (Source: PIB)

The IGST on imported goods will be the GST rates as notified in the rate notification except where IGST rate has been exempted separately.

Section 16(1) of CGST Act entitles a registered person to take credit of the input tax charged on his inward supplies, which he uses or intends to use in the course or furtherance of his

business, subject to conditions and restrictions which may be prescribed and in the manner provided under section 49 of the CGST Act 2017, which gets credited to his e- credit ledger.

Accordingly, if a registered person receives an inward supply and tax has been duly charged on it, at a rate which is in consonance with the rate prevailing at the time of such supply, the said registered person is entitled to the credit of such tax paid, subject to the other conditions/ restrictions and manner specified in section 49 of the CGST Act 2017. (PIB)

The GST rate will be determined as per the time of supply provisions. (Refer Section 14 of the CGST Act, 2017). (Source: PIB)

Admission to sporting events like IPL will attract 40% GST, However, this rate of 40% will not apply to admission to recognized sporting events. (PIB)

Admission to other sporting events including recognised sporting events where the ticket price is not more than ₹500 continues to be exempt, and if the ticket price is more than ₹500, it continues to be taxed at the standard rate of 18%. (PIB)

As per Section 14 (a)(i) of CGST Act, 2017, in case the goods or services or both have been supplied before the change in rate of tax, and the invoice for the same has been issued after the change in rate of tax, then the time of supply i.e. date of liability to pay tax on such supply will be as follows:

• If the payment is received after the change in rate of tax, then time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier.

• If the payment has been received before the change in rate of tax, the time of supply shall be the date of receipt of payment.

(Source: PIB)

Prime Minister Narendra Modi has expressed his happiness that the GST Counci has collectively agreed to the proposals submitted by the Union Government on GST rate cuts and reforms

"During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST. The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy.

"Glad to state that @GST_Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth. The wide ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses," PM Modi said.

The changes in GST rates will be notified in the rate notification. The notification would be placed on the CBIC website, according to PIB.

No, there is no change in threshold of the registration required for goods under CGST Act, 2017. (source: PIB)

As per recommendations of the GST Council in its 56th meeting, the changes in GST rates on services and goods other than cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and beedi will be effective from 22nd September, 2025.

For the specified goods, namely, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and beedi, the existing rates of GST and compensation cess will continue to apply and the new rates will be implemented at a later date to be notified, based on discharging of entire loan and interest liabilities on account of compensation cess.

(Source: PIB)

Farmers are likely to benefit from lower tax on multiple agriculture-use items.

As per the GST Council's decision, agriculture goods such as tractors, agricultural, horticultural and forestry machines for soil preparation or cultivation, harvesting or threshing machines, including straw or fodder balers, grass or hay movers, composting machines etc. all will be taxed at a GST rate of 5%, down from 12%

Further, the GST rate on 12 specified bio-pesticides and natural menthol has come down from 12% to 5%, which is widely used by farmers.

The GST Council has decided to reduce the GST rate from 28% to 18% on buses, trucks, and ambulances. Uniform GST rate of 18 % on all auto parts irrespective of their HS code; Three-Wheelers from 28% to 18%

Nil. There will be exemption of GST on all individual life insurance policies, whether term life, ULIP or endowment polices and re-insurance there of, to make insurance affordable for common man and increase the insurance coverage in the country.

Exemption on GST on all individual health insurance policies, including family floater policies and policy for senior citizens and re-insurance.

After the new GST rates, health and life insurance are set to become cheaper.

"The GST Council’s move to exempt individual health and life insurance from GST is a major shift. For policyholders, it simply means the premiums they pay will now be lighter by 18 percent," says Hanut Mehta, CEO and Co-Founder at BimaPay Finsure.

"This change has two sides. In the short term, the financing ticket size per customer will come down since the tax element is no longer there. But on the positive side, lower entry cost will push more people, especially first-time buyers, towards buying insurance," he adds.

According to Mehta, the reduction in price will also makes room for people to consider higher sum insured.

Yes. As per the Finance Minister, GST rate will be reduced from 12% to zero on 33 lifesaving drugs and medicines, and from 5% to zero on 3 lifesaving drugs and medicines used for treatment of cancer, rare diseases and other severe chronic diseases.

Yes. Spectacles and goggles for correcting vision will be taxed at a GST rate of 5%, down from 28%

Finance Minister Nirmala Sitharaman says common man items such as Hair Oil, Toilet Soap, Soap Bars, Shampoos, Toothbrushes, Toothpaste, Bicycles, Tableware, Kitchenware, and other household articles have all been brought under the 5% GST slab.

Similarly, the GST on items such as ultra-high temperature milk, chena, and paneer has been reduced from 5% to nil. All Indian breads will also attract a nil rate

Reduction of GST from 12% or 18 % to 5% include food items such as Namkeen, bhujiya, Sauces, Pasta, Instant Noodles, Chocolates, Coffee, Preserved Meat, Cornflakes, Butter and Ghee. (Source: PIB)