GST Update

56th GST Council Meeting: New Rates & Price Reductions

  • 04 Sep, 2025
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56th GST Council Meeting: Rate Changes & Price Reduction Calculator | Institute of Account & Taxation Training (IATT)

56th GST Council Meeting: Rate Changes & Price Reduction Calculator

Comprehensive Insights | Sector-Wise Impact | Business Action Points

Key Highlights of 56th GST Council Meeting

  • Meeting Date: 3rd–4th September 2025
  • Major Reform: Simplified GST structure with 0%, 5%, 18% & 40% slabs.
  • Objective: Reduce compliance, improve affordability, and ensure fairness.

Automobiles & Mobility

  • Small cars, tractors – Cheaper (18% → 5%).
  • Luxury bikes (>350cc) – Costlier (31% → 40%).
  • EVs – No change (5%).

Consumer & FMCG

  • Staples like food, juices – Now at 5%.
  • Personal care & essentials – Cheaper.
  • Strong FMCG-led retail push.

Financials

  • Banks & NBFCs benefit from lower loan EMIs.
  • Insurance – Now GST exempt.

Infrastructure & Commodities

  • Fertilizers at 5% – Rural boost.
  • Solar cells at 5% – Green energy push.
  • Cement neutral due to coal hike.

Hospitality & Tourism

  • Budget hotels (< ₹1,000/night) – Tax-free.
  • Mid-range hotels – Reduced to 12%.
  • Luxury hotels – 18% flat.

Healthcare

  • Life-saving drugs – Exempt.
  • Medical devices – 5% rate.

Anti-Profiteering Provisions

Businesses must pass GST rate reductions to consumers as per Section 171 of CGST Act. Non-compliance may result in penalties, refunds, and cancellation of GST registration.

  • Revising MRP & price lists.
  • Passing benefits in invoices.
  • Updating accounting & billing software.

GST Price Reduction Calculator

FAQ – GST Rate Update & Anti-Profiteering

1. Do businesses need to reduce prices after GST cuts?

Yes, benefits must be passed on to consumers as per anti-profiteering provisions.

2. What records should be maintained?

Businesses must maintain updated invoices, revised MRPs, accounting records, and GST returns showing compliance.

3. Which sectors benefit most?

FMCG, automobiles, fertilizers, solar energy, healthcare, and budget hospitality benefit significantly from lower rates.

Conclusion

The 56th GST Council reforms simplify taxation, enhance affordability, and create growth opportunities across industries. Businesses must ensure compliance with anti-profiteering by updating billing, revising MRPs, and using tools like the GST Price Reduction Calculator.


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