On 22 September 2025 i.e. Navratri, major changes are going to be implemented in Goods and Service Tax (GST) from the day before Navratri. It is being considered a major change in the country’s tax system, which is also being called GST 2.0. Now GST will have two main rates – 5% and 18%. Also, 40% tax will be levied on things like alcohol, tobacco. The GST Council headed by Finance Minister Nirmala Sitharaman made these changes in September. Their aim is to make tax rates easier, increase shopping and tax tax more sensibly. But there are still many questions in the minds of people about the new rules. Therefore, we will try to explain GST in simple language.
1- What is GST?
GST and Goods and Services Tax is an integrated indirect tax imposed on goods and services in India. It replaces different taxes such as old excise, VAT and service tax and implements a uniform tax system in the whole country.
2. When will the revised GST rates apply?
The government has decided to implement new GST rates from 22 September, 2025, which will be based on the recommendations of the GST Council.
3. What will be the changes in GST from 22 September?
From this date, GST rates on many goods and services will be changed so that tax rates are simple, clear and equally applied. This will benefit both businesses and consumers.
4. Will the registration rules change?
No, there will be no change in the rules and limits of GST registration. Only tax rates will be amended.
5. How will the new rates be reported?
The government will announce these rates through official notifications, which will be available on the website of CBIC.
6. If the supply was first and the challan was released later, then which rate will be applicable?
The rate will be applicable depending on the date of supply. If both supply and payment are before 22 September, the old rate will apply, otherwise the new rate.
7. What will be the tax rate in case of advance payment?
If the advance amount is received before September 22, the old rate will be applicable, but the new rate will be applicable on the advance received on or after 22 September.
8. Will the e-way bill be canceled and released again?
No. The e-way bills that have been released before changing the rate will remain valid for their period.
9. Which rate will be applicable to the stock already existing?
GST is applied at the time of supply, so the new rate will be applicable on the supply after September 22, even if the stock is before.
10. What will be the input tax credit (ITC) found on old procurement?
ITC found on earlier purchase will be valid and it can be used. The ITC before the change of rates will not be affected.
11. If there is a discount on supply now, what will be the ITC already received?
The ITC will not be used for the exemption supply from 22 September and it will be reverse.
12. Will the return of ITC be possible under inverted duty structure?
No. ITC withdrawal can be found under inverted duty only when permanent tax rate difference is there, not on temporary changes of rates.
13. Which life insurance policies will be exempted from GST?
All personal life insurance policies such as term plans, endowments and ULIP exemption will also be included, as well as their reins.
14. What exemption will be given to health insurance policies?
Private health insurance policies such as family floater and senior civilian schemes will be free from GST. There will also be a discount on their reins.
15. What are the rules on input services of insurance companies?
Only rehabilitation services will be exempted, but there will be tax on commission and brokerage, which will not be claimed by ITC.
16. What will be tax on passenger transport services?
Passenger transport will be taxed by road without ITC, while operators can opt for ITC with 18% tax. There will be 5% tax on Economy Class, 18% tax on Economy Class in air travel.
17. What will be the rate applied to multimodal goods transport?
If there is no air travel, 5% tax will be levied and ITC will be limited to 5%. If air travel is included, 18% tax and complete ITC will be applicable.
18. Who will pay tax on local delivery through e-commerce operator?
If the service provider is unregistered then the e-commerce operator will pay tax, otherwise the registered provider will be responsible.
19. What is GST rate on local delivery services?
18% tax will be levied. The registered supplier will pay tax himself, the e-commerce operator will pay tax if it is unregistered.
20. Will the local delivery goods given through e-commerce be considered as transport agency (GTA)?
No, it will not be considered a goods transport agency but a separate category of service.
21. MRP of medicines present before September 22 will be withdrawn?
No, there is no need to withdraw any stock. Just will have to share the new price list and share it in the market.
22. Why was the medicines not completely exempted from GST?
On getting complete exemption, manufacturers will not be able to take input tax credit, which will increase the cost and will fall on consumers. Therefore, drugs have been kept at a rate of 5%.
23. Why was the agricultural machinery not completely tax free?
If you get complete discount, the manufacturer will lose ITC, which will increase the price. Therefore, a concessional tax rate has been kept for the convenience of farmers and feasibility of producers.
24. Why was GST not removed on raw cotton?
Reverse charge is applicable on cotton, so farmers do not pay tax directly. This system maintains the ITC of the industry, which keeps the price under control.
25. What are the rules on Geotextile and Agro Textile?
They are considered to be a cloth, not plastic. Although there may be some upside down, GST does the process of withdrawal of input credit rapidly.
26. What tax will be taxed on lease or rentless lease or rent?
Tax rates like goods will be applicable on these. For example, if there is 18% tax on the car, then without the driver’s rent, the same tax will be charged.
27. The revised GST rates will also apply to imported goods?
Yes, from September 22, new rates will be applicable on all imported goods, except which has any discount.
28. UHT is discount on milk, what tax on vegetable-based milk?
UHT is discount on milk, but plants based beverages like almonds or soy milk will be taxed at 5% tax.
29. Why was tax reduced on face powder and shampoo?
These are common domestic use items. Rate cuts will make the tax system simple and consumers will get relief, whether brand luxury or normal.
30. Why refund ban on fake zari (dhatukrit plastic film)?
The GST Council has decided to stop refunds on fake zari made from dhatukrita plastic film, while other plastic or rubber -based clothes are not banned.