Highlights of the 56th GST Council Meeting held in September 2025 

Introduction 

The 56th GST Council Meeting, chaired by Union Finance Minister Nirmala Sitharaman in September 2025, brought major changes to India’s tax system. From rationalizing GST slabs to cutting rates on essential goods and services, the meeting focused on making GST simpler and more affordable for taxpayers.

 Key Highlights of the 56th GST Council Meeting   

• Two main GST slabs: The Council decided that going forward, most items will fall under just two tax rates – 5% and 18%. A separate 40% rate will apply only to luxury and sin goods like tobacco, pan masala, premium bikes, yachts, etc. (Source: PIB Press Release)

• Daily essentials cheaper: Goods that people use every day such as milk, paneer, butter, medicines, noodles, and chocolates have either been made tax-free or moved into the 5% slab. This directly reduces the monthly expense of households.

• Relief on baby products: Items like baby bottles and diapers now fall in the lower GST bracket. This is a small but important step for parents.

• Insurance premiums exempted: One of the most talked-about decisions was removing GST from life and health insurance premiums. This makes policies more affordable for families. (Source: GST council)

• Electronics and appliances: Products such as TVs, washing machines, air conditioners, and projectors, which earlier attracted 28% GST, will now be taxed at 18%. This makes big-ticket home purchases more pocket-friendly.

• Vehicles: Small cars and two-wheelers with engine capacity below 350cc now fall under the 18% slab. Since most bikes in India are under this category, it will help a many middle-class buyers.

• Travel and hospitality: Eating out and staying in budget hotels will cost less as GST is reduced to 5%. Economy air travel remains at 5% and business class travel is brought down to 12%.

• Support for small businesses: The Council also announced procedural changes like pre-filled GST returns, faster refunds for small taxpayers, and simplified registration for e-commerce sellers. These steps are meant to save time and reduce compliance stress. (Source: PIB Press Release)

GST Rate Cuts Announced in the Meeting 

The Council decided to reduce GST on many everyday items so that people and businesses feel direct relief. Here’s a simple breakdown:

Items Under Higher GST Rate (40% Slab) 

While many goods became cheaper, the Council also decided to keep certain products in a 40% slab. These are either luxury items or goods that are harmful to health. The idea is to discourage their use and ensure they bring higher tax revenue.

GST Council Meeting 2025 – Procedural & Compliance Changes 

Apart from changing tax rates, the 56th GST Council Meeting also introduced steps to make GST filing and compliance easier for businesses and individuals. Here are the main decisions:

• Pre-filled GST returns: Taxpayers will now get returns that are already filled with details. This reduces the chances of mistakes and saves time while filing. (Source: PIB Press Release)

• Faster refunds for small taxpayers: Small businesses will not have to wait long for their refunds anymore. An auto-refund system will ensure quicker settlement.

• Simple registration for e-commerce sellers: Sellers who operate on platforms like Amazon or Flipkart can now register more easily. This encourages more small traders to go online.

• Push for digital filing: The government wants GST compliance to be fully digital. This means less paperwork and more ease for taxpayers.

State Reactions and Sectoral Impact 

The announcements made in the 56th GST Council Meeting received a mix of appreciation and concerns from states and industry leaders.

• Positive reactions:

• • The Chief Minister of Madhya Pradesh called the reforms “revolutionary,” highlighting that households, MSMEs, agriculture, and students will directly benefit.

  • Many business groups welcomed the GST rate cuts, saying they will boost demand and ease inflation pressures.

• Concerns raised:

• • Kerala’s Finance Minister warned of a revenue loss of around ₹2,500 crore for the state. The worry mainly comes from reduced GST on automobiles, electronics, and cement, which were big contributors to state revenue.

  • Some states also raised the issue of how they will make up for this revenue loss since the GST compensation system has ended.

• Impact on sectors:

• • FMCG and essentials: Lower taxes on food and household items are expected to increase sales.

  • Insurance and healthcare: Removal of GST on premiums gives families direct financial relief and boosts insurance adoption.

  • Automobile industry: Cheaper small cars and two-wheelers will likely drive higher sales, especially in rural and semi-urban markets.

  • Construction and cement: Lower tax on cement may reduce construction costs, giving some relief to builders and homebuyers.

  • Hospitality and travel: Reduced GST on hotels, restaurants, and flights is expected to boost tourism and travel during the festive season.

Conclusion 

The 56th GST Council Meeting 2025 has been one of the most impactful sessions so far. With major GST rate cuts, simpler compliance rules, and clear relief on essentials, the meeting delivered real benefits for people and businesses. While some states raised concerns about revenue loss, the overall sentiment remains positive. These GST Council Meeting highlights show that the government is moving towards a simpler, fairer, and more consumer-friendly tax system.

Suggested Read :

Highlights of the 55th GST Council Meeting

Impact of GST Council Decisions on Indian Businesses

Key GST Rate Changes Announced in Council Meetings

GST Council Meeting Updates 2025: What You Must Know

Role of GST Council in India’s Tax Policy Framework

Frequently Asked Questions on 56th GST Council Meeting 2025