The 56th GST Council meeting, held on 3rd September 2025 in New Delhi under the chairpersonship of Union Finance Minister Smt. Nirmala Sitharaman, brought several historic reforms to India’s Goods and Services Tax (GST) regime. The decisions focus on providing relief to common citizens, easing compliance for businesses, and ensuring smooth trade facilitation.
1. Major GST Rate Changes
Goods
- Daily essentials get cheaper:
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UHT milk, paneer (pre-packaged), pizza bread, khakhra, chapathi, and roti moved to 0% GST.
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Condensed milk, butter, ghee, cheese, nuts, dried fruits, and several other food products reduced from 12% to 5%.
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Healthcare relief: Over 30 life-saving medicines like Onasemnogene, Daratumumab, Alectinib, and Emicizumab have been exempted from GST. Many others reduced to 5%.
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Textiles & agriculture boost: Sewing threads, yarn, carpets, irrigation equipment, and agricultural machinery now taxed at 5% instead of 12%.
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Coal & energy impact: Coal, lignite, and peat now taxed at 18% (up from 5%), while renewable energy devices like solar cookers, water heaters, and biogas plants reduced to 5%.
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Tobacco & sin goods: Pan masala, aerated drinks, caffeinated beverages, and certain tobacco products now attract 40% GST/cess, up from 28%.
Services
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Clarification issued: Stand-alone restaurants cannot declare themselves as “specified premises” to opt for 18% GST with ITC.
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Lottery valuation rules aligned with revised tax structure.
2. Implementation Timeline
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22nd September 2025: Most goods and service rate changes take effect.
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Tobacco, pan masala, gutkha, and cigarettes will continue at existing rates until compensation cess obligations are cleared.
3. Institutional & Trade Facilitation Measures
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Goods and Services Tax Appellate Tribunal (GSTAT) will be functional by end of September 2025 to accept appeals, with hearings starting by December 2025.
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A backlog appeal deadline has been set for 30th June 2026.
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Provisional refund reforms: 90% provisional refunds under Inverted Duty structure will be system-driven, reducing compliance burden.
4. What This Means for You
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Consumers: Daily essentials like milk, paneer, and bread become cheaper, while unhealthy products like pan masala and sugary drinks become costlier.
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Farmers & textile sector: Lower GST on agricultural machinery, irrigation tools, and textile items will encourage growth.
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Businesses: GSTAT ensures faster dispute resolution, while simplified refund systems enhance ease of doing business.
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Healthcare: Reduced GST on medicines provides relief to patients battling critical illnesses.
Conclusion
The 56th GST Council meeting marks a significant step in making GST more citizen-friendly, business-oriented, and health-conscious. With rationalized tax rates, trade reforms, and stronger dispute resolution mechanisms, India’s GST regime is expected to become more transparent, efficient, and equitable.