FAQ on GST Rate Rationalization based on recommendations of the GST Council in its 56th Meeting on 3rd September, 2025 GSTDated:- 22-9-2025Q1. Is it required to recall and re-label MRP on medicines already in the supply chain before 22nd September,2025? H
FAQ on GST Rate Rationalization based on recommendations of the GST Council in its 56th Meeting on 3rd September, 2025
GST
Dated:- 22-9-2025
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 12.9.2025 and 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 2
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ks?
Answer: A Special Composition Scheme on supply of the bricks (other than sand lime bricks) was implemented w.e.f 1st April,2022 based 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 except on sand 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 of 6% 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:
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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 provi
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tracted 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:
(a) 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.
(b) 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, w
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ervices 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 air 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':
(a) GTA input: Rs 36 (18% of Rs. 200)
(b) Input on the services of goods transportation by air: Rs 144 (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
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