The GST Council, in its 56th meeting held on 3rd September 2025, along with subsequent circulars and clarifications, has brought several important changes impacting businesses, service providers, and consumers. The National Pharmaceutical Pricing Authority (NPPA) and the GST Council have issued detailed guidelines on GST rates, exemptions, and compliance procedures. Below is a simplified breakdown of the key points.

1. Medicines & Medical Devices – Revised MRP Implementation

• All drug manufacturers/marketers must revise the Maximum Retail Price (MRP) of medicines and devices to reflect revised GST rates.
• A revised/supplementary price list (Form V/VI) must be issued to dealers, retailers, State Drug Controllers, and the Government.
• Re-labelling or recalling old stock (before 22nd Sept 2025) is not mandatory, provided compliance is ensured at the retailer level.

2. GST on Drones

• Previously, drones attracted different GST rates depending on usage (5%, 18%, or 28%).
• Now, a uniform 5% GST applies to all drones, irrespective of type or use.

3. GST on Bricks

• Under the Special Composition Scheme (from April 2022):
  • Bricks attract 6% GST without ITC or 12% with ITC (threshold ₹20 lakhs).
• No major change in Sept 2025, except:
  • Sand lime bricks – GST rate reduced from 12% to 5%.

4. Life & Health Insurance Services

• Individual life and health insurance policies (including for family) are exempt from GST.
• Reinsurance services for such policies are also exempted.
• Other inputs (like brokerage/commission) – ITC to be reversed since output is exempt.

5. Hotel Accommodation Services

• For rooms costing ≤ ₹7,500/day:
  • GST is 5% without ITC (mandatory).
  • Hotels cannot opt for 18% with ITC on such rooms.

6. Beauty & Wellness Services

• Attract 5% GST without ITC (mandatory).
• Service providers cannot opt for 18% with ITC.

7. Input Tax Credit (ITC) Rules for 5% without ITC Supplies

• ITC cannot be taken for goods/services exclusively used for such supplies.
• For mixed-use inputs, proportionate ITC reversal is required under Section 17(2) of CGST Act.

8. Job Work Services

• Bus body building – 18% with ITC.
• Bricks job work – 5% with ITC (where output bricks attract 5%).

9. Multimodal Transportation of Goods

• Without air transport: 5% GST with restricted ITC (limited to 5% of value of transport input services).
• With air transport involved: 18% GST with full ITC.

10. Local Delivery Services via E-Commerce Operators (ECOs)

• Covered under Section 9(5) CGST Act.
• GST @18% applicable:
  • If supplied by unregistered person via ECO → ECO pays GST.
  • If supplied by registered person via ECO → Supplier pays GST.
• ECO-provided delivery services are not treated as GTA (Goods Transport Agency).

11. Leasing & Renting Services

• Without operator → taxed at same rate as supply of like goods.
• With operator (e.g., car + driver) → option of:
  • 5% with ITC on input services of same line, OR
  • 18% with full ITC.

Visit www.cagurujiclasses.com for practical courses