Official Source
Ministry of Finance / GST Council
The GST Council, in its latest meeting chaired by the Union Finance Minister with Finance Ministers of all states, has approved a comprehensive rate rationalization affecting over 120 goods and services. These changes are aimed at reducing the tax burden on consumers and simplifying the rate structure for businesses.
Key Rate Changes
Reduced Rates — Goods:
- ▸Packaged drinking water (above 20 litres): 18% → 5%
- ▸Bicycles priced below ₹10,000: 12% → 5%
- ▸Namkeen and savoury snacks: 18% → 12%
- ▸Exercise books and notebooks: 12% → Nil
- ▸Fortified rice kernels (for government schemes): 18% → 5%
- ▸Insurance premium for pure term life policies: Proposed exemption under consideration
Increased Rates — Rationalised:
- ▸Aerated beverages with added sugar: 12% → 28% (to align with unhealthy food policy)
- ▸Certain luxury items: Standard 18% → 28% (plus applicable cess)
- ▸Online gaming (real money): Confirmed at 28% on full face value of bets
Impact on Businesses
Traders and Retailers: Businesses dealing in rate-revised categories must issue revised price lists immediately. All GST-registered dealers must update their accounting and POS software with new tax codes before the effective date.
Manufacturers: Input Tax Credit (ITC) recalculation may be required for goods under inverted duty structure. File for refund within 2 years from the date of relevant invoice.
Service Providers: Online platforms and aggregators should review service classification to ensure correct tax rate application.
Compliance Action Checklist
- ▸Update HSN/SAC codes in GST registration if applicable
- ▸Update billing software with revised rates effective from the notified date
- ▸Train staff on new rates and ensure correct invoicing
- ▸For stock held at the time of rate change — issue credit/debit notes appropriately
- ▸Reconcile GSTR-1 and GSTR-3B before the next return due date
- ▸Approach GST helpdesk (1800-103-4786) for category-specific queries
Next Steps
The official notification will be published in the Gazette of India within 7 working days. Businesses should watch for the effective date. For compliance queries specific to your business, contact Biswa Corporate Solutions at info@biswa.co.in.
Need help with compliance? Biswa Corporate Solutions offers expert guidance on GST, Income Tax, PF, ESIC, FSSAI, and more. Contact our experts →