The 56th meeting of the GST Council, held in New Delhi, under the chairpersonship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman marked a significant milestone in India’s tax reforms. On the 79th Independence Day, which is celebrated in 2025, the Indian Prime Minister, Narendra Modi, announced the vision of Next-Gen GST Reforms. This new GST rate will reform the taxation of many items, as approved by the Council, which will simplify the tax system, reduce the burden on citizens, support farmers, small traders, and MSMEs.
Hon’ble Prime Minister Shri @narendramodi announced the Next-Generation GST Reforms in his Independence Day address from the ramparts of Red Fort.
— Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025
Working on the same principle, the GST Council has approved significant reforms today.
These reforms have a multi-sectoral and… pic.twitter.com/NzvvVScKCF
The reforms particularly focus on rate rationalisation, reducing inverted duty structures, and expanding tax exemptions for essential goods, health services, and agriculture.
New GST Rate list of these items
| Category | Recommendation | Previous Rate | Revised Rate |
| Insurance | GST exemption on all individual life insurance (term, ULIP, endowment) and health insurance (including family and senior citizen policies) | 18% | NIL |
| Rate Structure | Simplification of the 4-tier GST structure into 2 rates: Standard (18%) and Merit (5%); Special de-merit rate of 40% for select goods | 0%, 5%, 12%, 18%, 28% | 5%, 18%, 40% |
| Common Household Items | Hair oil, soaps, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware | 12% / 18% | 5% |
| Food Items | UHT milk, paneer, Indian breads (roti, paratha, parotta) | 5% | NIL |
| Packaged foods (namkeens, sauces, noodles, chocolates, coffee, cornflakes, butter, ghee, preserved meat, pasta) | 12% / 18% | 5% | |
| Consumer Goods | TVs (all sizes), ACs, dishwashers, small cars, motorcycles ≤ 350cc | 28% | 18% |
| Agriculture | Tractors, harvesting/threshing machinery, composting machines, balers, mowers | 12% | 5% |
| Labour-Intensive Goods | Handicrafts, marble/granite blocks, intermediate leather goods | 12% | 5% |
| Construction | Cement | 28% | 18% |
| Medicines | 33 lifesaving drugs (12% → NIL); 3 cancer/rare disease medicines (5% → NIL); other drugs (12% → 5%) | 12% / 5% | NIL / 5% |
| Medical Devices | Surgical/dental/veterinary apparatus, diagnostic kits, glucometers, bandages, gauze | 12% / 18% | 5% |
| Automobiles & Transport | Small cars, motorcycles ≤ 350cc, buses, trucks, ambulances | 28% | 18% |
| Uniform rate of 18% on all auto parts; three-wheelers from 28% to 18% | 28% | 18% | |
| Textile Sector | Correction of inverted duty: Manmade fibre (18% → 5%); Yarn (12% → 5%) | 18% / 12% | 5% |
| Fertilizers | Sulphuric acid, nitric acid, ammonia | 18% | 5% |
| Renewable Energy | Renewable energy devices and parts | 12% | 5% |
| Hospitality | Hotel rooms ≤ ₹7,500/day | 12% | 5% |
| Personal Services | Salons, gyms, barbers, yoga centres, wellness services | 18% | 5% |
| Judicial Mechanism | Goods and Services Tax Appellate Tribunal (GSTAT) to be operational by Sept. 2025; hearings to begin by Dec. 2025 | – | – |
Data Source: PIB
Note: For a complete list, refer to this: Recommendations of the 56th Meeting of the GST Council held at New Delhi, today
When will the New GST Rate list be implemented?
According to PIB, the GST Council recommends that GST rates on services will be implemented with effect from 22nd September 2025.
Conclusion
The 56th GST Council meeting is very significant to Indian citizens in India’s tax reform by making a new GST rate list on various items. From simplifying the new GST slabs for India GST tax rate reform aims to boost affordability, economic growth, and encourage consumption. Additionally, the establishment of the GST Appellate Tribunal will improve tax dispute resolution, ensuring smoother functioning of the GST system.
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