Multiple GST Notifications on 16 January 2025 Introducing Significant Changes in GST Rates, Exemptions & RCM
The Central Board of Indirect Taxes and Customs (CBIC) has issued multiple notifications dated January 16, 2025, implementing the recommendations of the GST Council. These notifications introduce significant changes to Goods and Services Tax (GST) rates, exemptions, and the reverse charge mechanism, impacting various sectors. Below is a comprehensive overview of these changes:
Notification No. 01/2025 – Central Tax (Rate)
Amendments to Notification No. 01/2017-Central Tax (Rate):
- The GST rate on Fortified Rice Kernel (FRK), classified under HSN 1904, has been reduced to 5%.
- The definition of ‘pre-packaged and labelled’ has been revised to include all commodities intended for retail sale, containing not more than 25 kg or 25 litre, that are ‘pre-packed’ as per the Legal Metrology Act or bear mandatory label declarations.
- This notification is effective immediately.
Notification No. 02/2025 – Central Tax (Rate)
Amendments to Notification No. 01/2017-Central Tax (Rate):
- Gene therapy is now fully exempt from GST.
- This notification is effective immediately.
The therapy is a critical treatment option for various life-threatening disease. Earlier, GST on gene therapy was set at 12 percent.
Notification No. 03/2025 – Central Tax (Rate)
Amendments to Notification No. 39/2017-Central Tax (Rate):
- A concessional 5% GST rate is applicable to food inputs under HSN 19 or 21 supplied for food preparations intended for free distribution to economically weaker sections under government programs, subject to existing conditions.
- This notification is effective immediately.
Notification No. 04/2025 – Central Tax (Rate)
Amendments to Notification No. 08/2018-Central Tax (Rate):
- The GST rate on the sale of all old and used vehicles, including electric vehicles (EVs) not already specified, is increased from 12% to 18%.
- This notification is effective immediately.
Notification No. 05/2025 – Central Tax (Rate)
- The term “specified premises” now includes:
- Premises where the value of hotel accommodation supply exceeds ₹7,500 per unit per day.
- Premises declared as “specified” through filings by registered persons or new applicants using Annexures VIII and IX.
- Registered taxpayers must declare premises as specified on or after January 1 of the preceding financial year but no later than March 31. New taxpayers must file within 15 days of registration acknowledgment.
- These changes take effect on April 1, 2025.
Notification No. 06/2025 – Central Tax (Rate)
Amendments to Notification No. 12/2017-Central Tax (Rate):
- Introduces Entry No. 36B, exempting GST on insurance services provided by the Motor Vehicle Accident Fund under the Motor Vehicles Act, 1988.
- Adds “training partners approved by the National Skill Development Corporation” to Serial No. 69 in the services tariff list.
- Revises Entry No. 25A by changing “transmission and distribution” to “transmission or distribution.”
- Effective date: April 1, 2025.
Notification No. 07/2025 – Central Tax (Rate)
Amendments to Notification No. 13/2017-Central Tax (Rate) – RCM Provisions:
- Sponsorship services provided by body corporates now fall under the Forward Charge Mechanism. Body corporates are excluded from the Reverse Charge Mechanism (RCM) under Serial No. 4.
- Taxpayers under the composition levy scheme are no longer required to pay RCM on rent for commercial or immovable properties (excluding residential dwellings) to unregistered persons, as per Serial No. 5AB.
Notification No. 08/2025 – Central Tax (Rate)
Amendments to Notification No. 17/2017-Central Tax (Rate):
- The definition of “specified premises” is updated to align with clause (xxxvi) of paragraph 4 of Notification No. 11/2017-Central Tax (Rate).
- Effective date: April 1, 2025.
These updated GST rate notifications reflect proactive changes aimed at facilitating ease of doing business and improving compliance, aligning taxation policies with evolving economic needs.
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