The 56th meeting of the GST Council was held on 3rd September, 2025 at Sushma Swaraj Bhavan, New Delhi under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman.
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The recommendations made by the 56th GST Council are as below:
In Brief:
- Life insurance policies: GST on all individual life insurance policies whether term life, ULIP or endowment policies and reinsurance thereof is Exempted. This makes insurance affordable for the common man and thereby increase the insurance coverage in the country.
- Health insurance policies: GST on all individual health insurance policies (including family floater policies and policies for senior citizens) and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country.
- GST Rate Structure: Current 4-tiered (5%, 12%, 18%, 28%) tax rate structure is rationalised into 2 rate structure with a Standard rate of 18% and a merit rate 5%. A special de-merit rate of 40% for a select few goods and services is being fixed.
- GST Rate reduction:
- 18% or 12% is reduced to 5% on host of items such as hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste, Bicycles, Tableware, Kitchenware, other household articles, etc.
- 5% is reduced to NIL on Ultra-High Temperature (UHT) milk, Pre-packaged and labelled chena or paneer; All the Indian Breads like Chapati or roti, paratha, parotta etc.
- 12% or 18% is reduced to 5% on almost all of the goods items such as packaged namkeens, Bhujia, Sauces, Pasta, Instant Noodles, Chocolates, Coffee, Preserved Meat, Cornflakes, Butter, Ghee, etc.
- 28% is reduced to 18% on Air-conditioning machines, TVs-32 inch (all TVs now at 18%), Dishwashing machines, small cars, motorcycles equal to or less than 350 cc
- 12% is reduced to 5% on agricultural goods, such as tractors, agricultural, horticultural or forestry machinery for soil preparation or cultivation, harvesting or threshing machinery, including straw or fodder balers, grass or hay mowers, composting machines etc.
- 12% is reduced to 5% on labour intensive goods such as Handicrafts, Marble and travertine blocks, and Intermediate leather goods.
- 28% is reduced to 18% on Cement.
- 12% is reduced to NIL on 33 life saving drugs and medicines and from 5% to Nil on 3 lifesaving drugs & medicines used for treatment of cancer, rare diseases and other severe chronic diseases.
- 12% is reduced to 5% on all other drugs and medicines.
- 18% is reduced to 5% on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis.
- 12% is reduced to 5% on various medical equipment and supplies devices such as wadding gauze, bandages, diagnostic kits and reagents, blood glucose monitoring system (Glucometer) medical devices, etc
- 28% is reduced to 18% on Small cars and motorcycles equal to or below 350 cc & on buses, trucks, ambulance etc.
- Uniform rate of 18% on all auto parts irrespective of their HS code; Three-wheelers from 28% to 18%.
- 18% is reduced to 5% on manmade fibre & from 12% to 5% on manmade yarn. Thereby long-pending inverted duty structure is corrected on the manmade textile sector
- 18% is reduced to 5% on Sulphuric acid, Nitric acid and Ammonia to correct long-pending inverted duty structure in fertilizer sector.
- 12% is reduced to 5% on renewable energy devices and parts for their manufacture.
- 12% is reduced to 5% on “Hotel Accommodation” services having value less than or equal to Rs. 7500 per unit per day or equivalent
- 18% is reduced to 5% on beauty and physical well-being services used by common man including services of gym, salons, barbers, yoga centres, etc.
- GST Council recommends operationalisation of GST Appellate Tribunal (GSTAT) for accepting appeals before end of September and to commence hearing before end of December 2025.
Source: Press release 03.09.2025
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