56th GST council meeting !! New GST rates 2025 !! Revamp !! Two Slabs structure !! GST rate cuts !! Tax on agriculture products & Equipment !!
Following the "words of command" of Prime Minister Narendra Modi on 15 August 2025, Independence Day speech from Red Fort, the 56th Meeting of the GST Council was held at New Delhi on -3 September 2025, where the following decisions were taken-
- The GST council has approved a multisectoral and multi-thematic focus
- to improve the common citizens' lives and
- Ensure the ease of doing business for all, particularly on the radar are small traders and businessmen.
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The GST rate
rationalization focuses on -
- the common man,
- labor-intensive industries,
- farmers -& agriculture,
- health, and
- The rest key drivers of an economy.
Exemption of GST on all
individual Life insurance policies and health insurance policies.
- With respect to a life insurance policy,
- whether it is in respect of term life, or
- ULIP- Unit Linked Insurance Plan- and
- on a reinsurance plan.
With respect to the health
insurance policy-
- including family floater policies and policies of senior citizens) and reinsurance.
- Again, the purpose is to increase the coverage by giving economic leverage on respective policies.
- The sole purpose is to make insurance affordable for the common man and to increase insurance coverage in the country.
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At present, under the GST
regime, -
- We have 04 four-tier tax structure,
- such as 5% 12% 18, % and 28%.
- Now, from 22nd September onwards,
- We have only 02 tier taxslabs, that is 5% and 18%.
- It means the 12% and 18% tax structure shall be minimized to 5%,
- 5% shall be reduced to 0% and
- The 28% shall come down to 18%.
In the most important
decisions, the 03 diseases are making headlines
- One, reduction of GST from 12% to 5% on agriculture goods such as tractors, agricultural, horticulture, or forestry machines for soil preparation or cultivation, the harvesting or threshing machinery.
- The second most important items, which were under the 5% slab, have now been minimised to reduce to 0% slab.
- In 3rd most important decision, the items on which the highest GST slabs have been reduced from 28% to 18% are particularly the air-conditioned, TV of 32 inches, a dish washing machine, small cars motorcycles equals to all less than 350. Simultaneously, buses, trucks, ambulances, etc.
In other important
headlines-
- Reduction of GST on all drugs and medicines from 12% to 5%
- Reduction of GST from 18% to 5% on all medical apparatus and devices.
- Reduction on "hotel accommodation" from 12% to 5% which has a value less than or equal to Rs 7500 per unit per day or equivalent.
The GST rates on services will be implemented with effect from
the 22nd of September 2025.
After Effects
- Increasing the umbrella of term life insurance - more economic and social security for the family.
- In respect of health policy, the more social security in respect of something unexpected happening in the family with respect to health issues.
- That is a more secure and safer life.
- Strengthening of the citizen and state relationship, where the citizen is of the mindset that the state is taking care of them.
- Coming down the inflation.
- Increasing to more consumption.
- A higher saving rate in the Indian economy is achieved through domestic saving or policy investment saving.
- Fewer cases of GST violation, or in simple words, less generation of black money.
- More clear-cut transaction
- More economic transition online statistical data is available from the government.
- More ease of policy making with a high level of statistical data.
- More intensive, targeted, and horizontal economic distribution through GST revenue generation.
- More compliance with the business norms and ease of doing business.
- More mechanization of agriculture. It means that with less available time, we can do better agriculture, and adverse climatic management driven by high mechanization power.
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