GST WEEKLY UPDATE :25/2025-26 (21.09.2025) By CA Vipul Khandhar

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-By CA Vipul Khandhar

GST Bachat Utsav: P M Modi: Nex Gen reform applicable w.e.f. 22.09.2025: Swadeshi Movement:

The PM encouraged citizens to proudly declare their commitment to Swadeshi—“I buy Swadeshi,” “I sell Swadeshi”—and stated that this mindset must become intrinsic to every Indian. He asserted that such a transformation will accelerate India’s development. He appealed to all state governments to actively support the Aatma nirbhar Bharat and Swadeshi campaigns by boosting manufacturing in their regions with full energy and enthusiasm, and by creating a conducive environment for investment. He affirmed that when the Centre and states move forward together, the dream of a self-reliant India will be fulfilled, every state will develop, and India will become a developed nation.

GST FAQ Master Table:

Question	Answer
Q1.In which notification will I find the CGST rates changes for goods? Is a new Notification being issued?	Q. As per Department of Consumer Affairs’ Advisory dated 9thSeptember, 2025 manufacturers, packers or importers of pre-packaged commodities were permitted to revise retail sale price on unsold stock, manufactured/packed or imported prior to rate revision by way of putting sticker /stamping or online printing after complying with certain conditions, such as, advertising in two newspapers. Is re stickering /stamping or online printing on unsold stock, manufactured/packed or imported prior to rate revision and advertising in two newspapers mandatory? The Department of Consumer Affairs has issued an Advisory dated 18th September, 2025 in supersession of earlier advisory dated 9^th September 2025. The gist of the advisory is as under: Manufacturers/packers/importers/ their representatives to voluntarily affix additional revised price sticker, on unsold packages manufactured before 22nd September, 2025, and are lying with them, provided the original price declaration on the package is not obstructed. The requirement to issue advertisement about revised prices in two newspapers has been waived off. Manufacturers/packers/ importers are now required to send circulars to wholesale dealers/retailers, etc about revised prices with copy thereof endorsed to Director, Legal Metrology of the Central Government and Controller, Legal Metrology of all States/ UTs and to ensure price compliance at the retailer level. Manufacturers/packers/importers shall take immediate measures to sensitise dealers/ retailers/ consumers about revision in GST rates through all possible channels of communication including electronic, print and social media. You will find the changes in CGST rates on goods in Notification No. 9/2025- Central Tax (Rate)dated17.9.2025. This Notification No.9/2025-CentralTax(Rate)dated17.9.2025has been issued in supersession of earlier Notification No.1/2017- Central Tax (Rate) dated 28th June 2017.
Q2.In which notification will I find the list of exempted goods from CGST? Is a new Notification being issued?	You will find the list of goods exempted from CGST in Notification no.10/2025-CentralTax (Rate) dated 17.9.2025. This Notification no.10/2025-Central Tax (Rate) dated 17.9.2025 has been issued in supersession of earlier Notification No.2/2017- Central Tax (Rate) dated 28th June 2017.
Q3.In which notification willI find the GST rate for handicrafts? Is a new Notification being issued?	You will find the GST rates for handicrafts in Notification no.13/2025-Central Tax (Rate) dated 17.9.2025. This Notification no. 13/2025-Central Tax (Rate) dated 17.9.2025 has been issued to amend Notification No.21/2018- Central Tax (Rate) dated 26th July, 2018.
Q4.Which notification prescribes the amended rates of compensation cess?	Notification no. 1/2017-Compensation Cess (Rate) dated 28.6.2017 has been amended vide Notification no. 2/2025-Compensation Cess (Rate) dated 17.9.2025 to notify the changes in compensation cess rates.
Q5. Which is the notification relating to change in GST rate on goods imported for petroleum operations?	Please refer to notification no.11/2025-Central Tax (Rate) dated 17.9.2025 in this regard.
Q6.Has a new notification been issued for bricks under Special Composition Scheme?	There is no change in GST rate under the special composition scheme for bricks other than sandlime bricks. Notification no.14/2025-Central Tax (Rate) dated 17.9.2025 has been issued in this regard.
Q1. Is it required to recall and re-label MRP on medicines already in the supply chain before 22nd September,2025? How will the re-labelling be implemented?	Answer: The National Pharmaceutical Pricing Authority (NPPA) vide Oms dated 12.9.2025and 13.9.2025 have clarified the following: All manufacturers/ marketing companies selling drugs/ formulations shall revise the Maximum Retail Price (MRP) of drugs/formulations (including medical devices). The manufacturers/ marketing companies shall issue revised price list or supplementary price list, in Form V/VI, to dealers and retailers for display to consumers, and to State Drug Controllers and the Government, reflecting the revised GST rates and revised MRP. Recalling, re-labelling, or re-stickering on the label of container or pack of stocks released in the market prior to 22nd September, 2025 is not mandatory, if manufacturer/ marketing companies are able to ensure price compliance at the retailer level. The OMs are available in the website of the National Pharmaceutical Pricing Authority (NPPA) under Department of Pharmaceuticals: https://nppa.gov.in/uploads/ tender/01da3cf0cd3d17c68c9a63fe23878260.pdf and https://nppa.gov.in/uploads/tender/ 12fbbb0cb337f1d2d70afb3fbcb57f39.pdf
Q2. Unmanned aircrafts (Drones) attracted 5%,18% and 28% GST rate. 56th GST Council had recommended 5% GST rate on drones. Whether this 5% GST rate will apply to all types of drones?	Answer: Earlier unmanned aircrafts for personal use attracted 28% GST, unmanned aircrafts with digital camera/video camera recorders attracted 18% GST rate and all other unmanned aircrafts apart from aforementioned categories attracted 5% GST. The GST council in its 56th meeting held on 03.09.2025 has recommended uniform GST rate of 5% on all the drones.
Q3.What is the current GST rate on bricks?	Answer: A Special Composition Scheme on supply of the bricks (other than sand lime bricks) was implemented w.e.f 1stApril,2022based on the Report of the Group of Ministers on Capacity Based Taxation and Special Composition Scheme which was accepted by GST Council in its 45th meeting held on 17th Sep 2021. Under the scheme, bricks attract GST of 6% without ITC and 12% with ITC with threshold limit for bricks at Rs. 20 lakhs instead of Rs.40 lakhs as is applicable to goods. The GST council in its 56th meeting held on 3rd September, 2025 did not recommend any change on the special composition scheme rates exceptons and lime bricks on which GST rate has been recommended to be reduced from 12% to 5%. Hence, all kinds of bricks except sand lime bricks continue to attract GST of6% without ITC and 12% with ITC with a threshold limit of Rs. 20 lakhs.
Q4. What are the insurance services covered within the ambit of the exemption granted to individual life and health insurance?	Answer: Services of individual health and life insurance business provided by insurers to the insured, where the insured is not a group, are included within the ambit of the exemption. When these services are provided to an individual, or to an individual with his/her family, the same will be exempted.
Q5. In addition to exempting services of individual health and life insurance supplied by insurers, will any input services of insurers be also exempted?	Answer: At present, insurers are availing ITC on many inputs and input services such as commissions, brokerage and reinsurance, etc. Out of these input services, reinsurance services will be exempted. Input Tax Credit of other inputs or input services is to be reversed because the output services will be exempted.
Q6. Do hotels which supply units of accommodation having value less than or equal to Rs 7500/- per unit day have the option of supplying such units at 18% with ITC?	Answer: Suppliers of hotel accommodation service where the value of a unit of accommodation is less than or equal to Rs 7500/- per unit per day, shall have to charge GST at 5% without ITC on such units. It is a mandatory rate prescribed for such services, and the option to pay GST at the rate of 18% with ITC is not available for such units.
Q7. Will hotels supplying units of accommodation having value less than or equal to Rs 7500/- per unit per day be able to avail ITC in relation to such units?	Answer: The hotels supplying units of accommodation which have value less than or equal to Rs 7500/- per unit per day, shall not be able to avail ITC on such units, as the GST rate prescribed for such supplies is 5% without ITC.
Q8. Is the 5% without ITC rate on beauty and physical well-being services mandatory? Can service providers charge 18% with ITC?	Answer: The 5% without ITC rate on beauty and physical well-being services is mandatory. Service providers do not have the option to charge 18% with ITC on these services.
Q9.How should a service provider deal with input tax credit (ITC) in cases where GST is payable at a rate of 5% without ITC?	Answer: In such cases, Credit of input tax charged on goods or services used exclusively in supplying such services shall not be taken by the service provider; and Credit of input tax charged on goods or services used partly for supplying such services and partly for supplying other taxable supplies shall be reversed by the service provider as if the supply leviable to 5% without ITC is an exempt supply. Consequently, proportionate ITC shall be required to be reversed by the service provider as per Section 17(2) of the CGST Act, 2017 and the rules made thereunder.
Q10.What is the GST rate applicable on job work services in relation to bus body building?	Answer: Job work services in relation to bus body building are taxable at a GST rate of 18% with Input Tax Credit (ITC). Earlier, these services were covered under a specific entry [erstwhile Entry (ic) of Heading 9988] and attracted 18% with ITC. In the recent rate rationalization exercise, all residual job work services or other manufacturing services have been aligned to 18% with ITC, thereby subsuming the specific entry for bus body building.
Q11.What is the GST rate applicable on job work services in relation to bricks?	Answer: Job-work services in relation to those bricks that will attract GST@5% (E.g. sand lime bricks) will be taxable at the rate of 5% with ITC.
Q12.What is the GST rate applicable on multimodal transport of goods?	Answer: Multimodal transport of goods (where at least two different modes are used by a multimodal transporter) will be taxable as follows: 5% with restricted input tax credit — i.e. ITC allowed only on input services of transportation of goods limited to 5% of the value; when no leg of transport of goods is by air. 18%,with full input tax credit; when at least one leg of the transport is by air.
Q13. Can ITC be taken on multimodal transport services, where no leg of transport is by air and the applicable rate is 5%?	Answer. Input services of goods transportation limited to 5% of the value will be allowed evenif supplier of such services has charged a higher rate of tax. ITC will not be allowed for other inputs or input services. Example: ‘A’ engages ‘B’ (multimodal transporter) for transport of goods from New Delhi to Gaya for Rs. 1200, without involving any transportation through air. B’ hires GTA ‘C’ for Rs. 600 who charges tax @18% and Container Transport Operator ‘D’ for Rs. 400 who charges tax @5%. GST Rate applicable for the service provided by ‘B’:5% ITC available to ‘B’: GTA input: Rs.30 (5%ofRs. 600), not Rs.108(18%of600) CTO input: Rs. 20 (5% of Rs.400).
Q14. What is the tax treatment if multimodal transportation involves transport of goods through air also?	Answer: If at least one leg of transport is through air, the applicable GST rate will be 18%. In such cases entire ITC of inputs or input services is allowed. Example: ‘A’ engages ‘B’ (multimodal transporter) for transport of goods from New Delhi to Gaya for Rs. 1200, which involves transportation through air. B’ engages a service provider ‘C’ providing services of transport of goods through hair for Rs.800 and a GTA ‘D’ for Rs. 200 who charges tax @18%. GST rate applicable on the service provided by B:18% ITC available to ‘B’: GTA input: Rs36 (18% of Rs. 200) Input on the services of goods transportation by air: Rs144 (18% of Rs.800).
Q15.Who is liable to pay GST for Local Delivery Services provided through ECO?	Answer: Services by way of local delivery provided through an e-commerce operator (ECO) where the person supplying such services is not liable to register under Section 22(1) will be covered under Section 9(5) of the CGST Act. In such cases, the liability to pay GST will be on the ECO.
Q16. At what rate are local delivery services taxable? Answer: The services of local delivery are taxable at 18%.	If such service so flocal delivery are supplied directly by a registered person: GST@18% payable by that person. If such services of local delivery are supplied through ECO by a person who is not liable to be registered: GST @ 18% payable by the ECO under section 9(5). If such services of local delivery are supplied through ECO by a registeredperson:GST@18% is payable by the supplier of the local delivery service, i.e., the registered person supplying through ECO.
Q17. Whether an ECO providing the local delivery services are covered within the scope of GTA? What will be the effect if the local delivery services are provided through an ECO?	Answer: “Goods Transport Agency”(GTA) will not include: “electronic commerce operator by whom the services of local delivery are provided,” and “electronic commerce operator through whom the services of local delivery are provided.”
Q18.What is tax treatment for leasing or renting services without operator?	Answer: Majority of leasing or rental services without operator are taxed at the same rate of tax as applicable on supply of like goods. No change is proposed in this regard. The tax rate on such services will continue to be equal to the tax rate applicable on supply of like goods. For example, if cars or machines are taxed at18%then the rate of 18% will be applicable for leasing or renting (without operator) of such cars or machines. Similarly, if supply of any motor vehicle is taxed at 40% or 5% then the leasing or renting services (without operator) will also be taxed at 40% or 5% respectively.
Q19.What is the applicable tax rate on leasing/renting a car with operator?	Answer: Supplier of services of leasing/renting a car with operator (for example, driver) will now have the option of charging 5% with ITC of input services in same line of business or 18% with full ITC.

under Section 122B for non-compliance with Track and Trace added. Amendments also streamline credit notes, return filing, and exempt warehoused SEZ/FTWZ transactions from GST.

Key GST Changes Effective from 1st October 2025

Amendments in Definitions (Section 2)

- Local Authority:Explanation inserted to define Local Fund and Municipal Fund.
- Unique Identification Marking (Section 2(116A)):Introduced to facilitate Track & Trace Mechanism for evasion-prone commodities.

Omission of Provisions Relating to Vouchers

Sections 12(4)& 13(4) dealing with time of supply of vouchers omitted.

Section 17(5) Amendment

- Phrase “plant or machinery” replaced with “plant and machinery”, retrospective from 07.2017, overriding past rulings.

Section 20 – ISD Credit Distribution

Explicit inclusion of interstate RCM transactionsunder ISD mechanism.

Section 34(2) – Credit Notes

- Reduction in supplier’s output tax liability allowed only if:
  - Recipient reverses ITC; and
  - Tax incidence is not passed to another party.

Section 39 – Return Filing

Govt empowered to prescribe conditions & restrictionsin addition to timelines for return filing.

Reduced Pre-deposit for Penalty Appeals

Section 107(6):Pre-deposit reduced to 10% of penalty (earlier 25%).

- Section 112(8):For appeals before Appellate Tribunal in penalty-only cases, pre-deposit fixed at 10% of penalty.

New Penalty for Track & Trace Non-compliance (Section 122B)

Higher of ₹1,00,000or 10% of tax payable on such goods.

- In addition to other penalties.

New Section 148A – Track & Trace Mechanism

Govt empowered to implement unique digital stamping/marking for specified commodities to curb tax evasion.

Schedule III Amendment (Retrospective w.e.f. 01.07.2017)

Transactions involving goods warehoused in SEZ/FTWZ before clearance for export or DTA not treated as supply under GST.

Hence, the taxpayers are once again advised to reconcile their records and file their GST Returns as soon as possible if not filed till now.

Exemption from filing annual GST return (Form GSTR-9)for the said financial year 2024-25 onwards:

Notification No. 15/2025 – Central Tax, dated September 17, 2025, providing relief to small taxpayers under the Goods and Services Tax (GST).

As per notification, in exercise of powers under the first proviso to Section 44(1) of the CGST Act, 2017, the Commissioner, on recommendations of the GST Council, has announced that registered persons with an aggregate turnover up to ₹2 crore in any financial year shall be exempted from filing the annual return for that financial year.

Notification No. 14/2025 – Central Tax on September 17, 2025, has notified specific categories of registered persons who shall not be allowed refunds on a provisional basis.

Aadhaar Authentication Mandatory –

Any person who has not undergone Aadhaar authentication under Rule 10B of the CGST Rules, 2017 will not be eligible for refunds.

Restriction on Certain Goods –

Persons engaged in the supply of the following goods will not be eligible for refunds:

S. No.	Chapter/ Heading/ Sub-heading/ Tariff item	Description of Goods
1	0802 80	Areca nuts
2	2106 90 20	Pan masala
3	24	Tobacco and manufactured tobacco substitutes
4	3301	Essential oils

Explanation:

Terms such as tariff item, heading, sub-heading, and Chapter will have the same meaning as defined in the First Schedule to the Customs Tariff Act, 1975.

Rules of interpretation of the First Schedule to the Customs Tariff Act, including Section and Chapter Notes, shall also apply.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(Author is a well known Chartered Accountant practicing at Ahmedabad on Direct & Indirect Taxes)