The 56th Goods and Services Tax (GST) Council meeting, chaired by Union Minister Nirmala Sitharaman, Ministry of Finance (MoF) and Ministry of Corporate Affairs (MoCA), was held from September 02 to September 03, 2025 at Sushma Swaraj Bhawan in New Delhi, Delhi.
- The GST Council has approved Next-Gen GST reforms, effective September 22, 2025, aimed at improving the lives of the common man and ensuring Ease of Doing Business (EoDB) for all, including small traders and businessman.
Exam Hints:
- What? 56th GST Council Meeting
- Chaired by: Union Minister Nirmala Sitharaman, MoF
- Where? New Delhi, Delhi
- Key Approvals: Next-Gen GST reforms, two-tier tax structure of 5% and 18%, and Special Demerit Rate of 40%
- Special Demerit Rate imposes on: luxury items, and sin goods such cigarettes, tobacco and tobacco-related products
Key People:
Union MoS and CMs of Various States: Union Minister of State (MoS) Pankaj Chaudhary, MoF; Pramod Sawant, Chief Minister (CM) of Goa; Omar Abdullah, CM of Jammu & Kashmir (J&K); Rekha Gupta, CM of Delhi; Mohan Charan Manji, CM of Odisha and Nayab Singh Saini, CM of Haryana attended the meeting.
Dy-CMs and FMs of Various States: Also, deputy CMs of Arunachal Pradesh (AR), Bihar, Madhya Pradesh (MP), and Telangana; besides Finance Ministers (FMs) of States & Union Territories (UTs) (with legislature) and other senior officials of the MoF and States/ UTs were present at the meeting.
Key Approvals:
Approval of 2-Slab Structure: The GST council has unanimously approved a two-tier tax structure of 5% and 18%, replacing the previous 4-tier rate structure of 5%, 12%, 18% and 28%.
Special Demerit Rate: Apart from the new tax structure, the council has also introduced an additional slab i.e. a special demerit rate of 40% for select items, including tobacco and luxury items.
7 Pillars of Next-Gen GST Reforms:
Building on the success of GST: GST is based on the approach of ‘One Nation, One Tax’. It has expanded the taxpayer base from 66.5 lakh (in 2017) to 1.51 crore (in 2025); and introduction of simpler 2-tier system (5% and 18%).
Rationalizing rates for fairer taxation: It aims to introduce smoother duty structures and faster processing of refunds.
Simplifying filing through technology: It facilitates easy registration for small and low-risk businesses; 90% upfront provisional refunds for exporters; ensure digital compliance with e-voicing and promote Artificial Intelligence (AI)-driven risk detection.
Putting Consumer First: This pillar introduces GST rate for essential goods within the range of 0%-5%. While, GST rates for high-value items like cars reduced from 28% to 18%.
Empowering MSMEs and Manufacturers: Introduces fixed inverted duty structures and simpler rates to boost ‘Make in India’ initiative.
Stronger states, Stronger Bharat: It aims achieve sustainable revenue growth for all states and rationalized rates will increase demand.
Lower taxes = Higher Spending: Low tax rates will increase purchasing capacity that will further increase the demand and also industries will grow.
Revised GST Rates:
Food and Household Sector: GST rate for products like Ultra-High Temperature (UHT) milk, Pre-packaged and labelled chena or paneer, all the Indian breads have been revised down from 5%-18% to NIL.
- Daily household items such as soaps, shampoos, toothbrushes, toothpaste, tableware, bicycle, reduced from existing 12% to 5%.
- Similarly, GST rate for food items like packaged namkeens, Bhujia, sauces, pasta, chocolates, coffee, preserved meat, among others, decreased from 12%-18% to 5%.
- Also, for consumer durables such as Televisions (TVs) including Liquid Crystal Display (LCD) and Light Emitting Diode (LED), the GST rate has reduced from previous 28% to 18%.
Education: The GST rate for most of the study essentials such as pencils & sharpeners, notebooks, exercise books, among others, reduced from 12% to 0%.
- Similarly, other items like geometry boxes, school cartons, trays, revised down from 12% to 5%.
Medical Sector: The GST rate for 33 life-saving drugs like Agalsidase Beta, Imiglucerase, Atezolizumab and many others; and diagnostic kits, reduced from 12% to 0%.
- While, for other medicines such as Ayurveda, Unani, Homoeopathy, the GST rate reduced to 5%, compared to previous rate of 28%.
- Also, GST rate has been reduced for medical oxygen, thermometers, surgical instruments; as well as for medical, dental, and veterinary devices, from 12%-18% to 5% and from 18% to 5%, respectively.
Home Building & Materials: The GST rate has been reduced on cement and construction materials for instance: cement (from 28% to 18%), marble/travel blocks, granite blocks, sand-lime bricks, (from 12% to 5%), and bamboo flooring, packaging cases & pallets (from 12% to 5%).
Other Sectors: GST rate for service including hotel stays up to Rs 7,500 per day (from 12% to 5%); and gym, salons, barbers, yoga (from 18% to 5%).
- Similarly, for handicrafts products (from 12% to 5%); wooden/meta/textile dolls & toys (from 12% to 5%)
List of Revised GST Rates for Various Sectors:
| Daily Household Items | ||
|---|---|---|
| List of Items | Previous GST Rate | New GST Rate |
| Soaps, shampoos, toothbrushes, toothpaste | 18% | 5% |
| Dairy products like: Butter, Ghee, Cheese & Dairy Spreads, Condensed Milk, other dried nuts | 12% | 5% |
| Ultra-High Temperature (UHT) milk, Pre-packaged and labelled chena or paneer | 5% | NIL |
| Food items like packaged namkeens, Bhujia, sauces, pasta, chocolates, coffee, preserved meat, among others | 12%-18% | 5% |
| Healthcare | ||
| Individual Health & Life Insurance | 18% | NIL |
| Corrective Spectacles | 12% | 5%
|
| Medicine & Medical Devices | ||
| 33 life-saving drugs | 12% | 0%
|
| 3-life saving drugs used in the treatment of cancer, rare diseases and other severe chronic diseases | 5% | 0% |
| Other medicines such as Ayurveda, Unani, Homoeopathy | 28% | 5% |
| Education | ||
| Study essential items like pencils, exercise books, erasers, crayons, and sharpeners | 12% | 0% |
| Other items like: geometry boxes, school cartons, trays | 12% | 5% |
| Agriculture | ||
| Farming equipments such as: tractors, tractors tyres, and parts, drip irrigation system & sprinklers, among others | 12%-18% | 5% |
| Automobiles | ||
| Small cars, two-wheelers ≤350 cc | 28% | 18% |
| Buses, Trucks, 3-wheelers, all auto-parts | 28% | 18% |
| Electronic Appliances | ||
| Air Conditioners (ACs), Televisions (TVs)(above 32 inch, including both LED and LCD) | 28% | 18% |
| Sin Goods and Luxury Goods | ||
| Tobacco and tobacco-related items, cigarettes, aerated drinks, luxury vehicles, among others | 28% including Cess | 40% |
Click Here for Complete List of Revised GST Rate
About Goods and Services Tax (GST) Council:
GST Council is a constitutional body introduced through 101st Amendment Act, 2016 in the constitution. It was constituted under Article 279-A of the constitution.
Chairperson- Union Minister Nirmala Sitharaman, Ministry of Finance(MoF)
