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Indirect Taxation

November 2025

FAQs on the 56th GST Council Meeting

Frequently Asked Questions (FAQs) on the 56th GST Council Meeting

GST rate reductions effective 22.09.2025 spurred demand and festive sales with some suppliers reporting sharp growth; authorities are monitoring e-commerce and major suppliers to ensure consumers receive the benefit. A nationwide GST Appellate Tribunal e-filing portal is operational with one-time registration, digital hearings and staggered filing windows for pending appeals, final cutoff 30.06.2026. GSTR-3B from 01.10.2025 disallows auto-population of ITC, makes auto-calculated tax liability non-editable and requires buyers to reverse ITC for supplier credit notes. A prior CBIC circular on post-supply discount evidence is withdrawn. Refund rules permit a 90% provisional sanction for system-rated low-risk claims subject to existing safeguards. Net GST growth for September was modest. The FAQs clarify that the new rates apply to supplies made on or after the effective date.

Frequently Asked Questions:

  1. What is the GST rate for the transportation of goods by the multi-modal transporter?
    Multimodal transportation of goods will be taxed at 5% GST with restricted ITC, provided no transportation of goods by air is involved. However, where the transportation of goods by air is involved, then the rate of GST will be 18% with full ITC.
  2. Why not fully exempt GTA services from GST considering the importance of this sector?
    When a service is exempt, the service provider cannot claim ITC. This adds to their cost and makes the service costlier. Moreover, specific exemptions have already been provided where required such as transport of essential items (B2C) like agricultural produce, milk etc.
  3. What is the recommended GST rate on services by way of job work in relation to pharmaceutical products?
    These services will now attract a rate of 5% with ITC. This was earlier taxable at 12%.
  4. What is the recommended GST rate on services by way of job work in relation to hides, skins and leather falling under Chapter 41?
    The said services will now attract the rate of 5% with ITC. This was earlier taxable at 12%.
  5. Why not make job work completely tax-free instead of just lowering the rate?
    Exempting job work services will break the ITC chain, which increases costs. This is especially relevant for the sectors where multiple layers of job-workers are involved. A lower rate of 5% with ITC, gives full credit benefit for businesses thereby avoiding any cascading of tax.
  6. Whether the works contract services relating to oil and gas exploration and production (E&P) in the offshore area will be taxed at 18%?
    Yes, the works contract and associated services, in respect of offshore works contact relating to oil and gas Exploration and Production (E&P) in the offshore area will be taxed at 18% GST.
  7. Whether the hotel accommodation services, where the value of supply is up to Rs. 7500 per unit per day, or equivalent, will be taxed at 18%?
    No, the said service will attract a GST rate of 5% without ITC.
  8. What is the recommended GST rate on beauty and physical well-being services? What all will be covered under this rate?
    Beauty and physical well-being services, including services of health clubs, salons, barbers, fitness centers, yoga, etc. will attract GST rate of 5% without ITC. These services attracted 18% GST earlier.
  9. Whether lottery tickets, betting, gambling, horse racing and casinos attract GST at the rate of 40%?
    Yes, for all specified actionable claims, including betting, casinos, gambling, horse racing, lottery and online money gaming, GST rate of 40% will apply.
  10. What is the recommended rate of GST on services of admission to sporting events like the IPL?
    Admission to sporting events like IPL will attract 40% GST, However, this rate of 40% will not apply to admission to recognized sporting events.
  11. What will be the rate of GST on services of admission to sporting events other than sporting events like IPL?
    Admission to other sporting events including recognised sporting events where the ticket price is not more than Rs. 500 continues to be exempt and if the ticket price is more than Rs. 500, it continues to be taxed at the standard rate of 18%.
  12. Why is a 40% rate referred to as a ‘special rate’? What is the basis for subjecting goods to a special rate?
    The special rate is applicable only on few select goods, predominantly on sin goods and few luxury goods and therefore is a special rate. Most of these goods attracted Compensation Cess in addition to GST. Since it has been decided to end the Compensation Cess levy, the Compensation Cess rate is being merged with GST so as to maintain tax incidence on most goods. On other goods and services, the special rate has been applied as these were already attracting the highest GST rate of 28%.
  13. Why has small agricultural tractors not been fully exempted from GST?
    The objective is to provide relief to the farmers while not disincentivising domestic producers. Fully exempting small tractors would be counterproductive. When the rate of tax on any goods is nil, the suppliers cannot claim Input Tax Credit (ITC) on the inputs used in the manufacture of the goods and will have to reverse the same. This means that the producers have to absorb this cost, which will eventually be passed to the buyers.