Delhi Govt. Notifies GST Rate Changes on Services: Reflects Decisions from 56th GST Council Meeting [Read Notification]
The changes have been effective from 22 September 2025, except certain explanations which take retrospective effect from 1 April 2025.
GST - rate - changes - Taxscan
GST - rate - changes - Taxscan
The Government of the National Capital Territory of Delhi has notified sweeping changes in the Goods and Services Tax (GST) rates applicable on services, aligning the State tax component with the decisions taken at the 56th GST Council Meeting held in New Delhi in early September.
The Notification No. 15/2025-State Tax (Rate), dated 22 September 2025, amends the earlier rate notification issued in June 2017 and revises tax slabs across several key service categories.
The 56th GST Council meeting and its effects, which have been hailed as a major milestone in the GST regime effectively rationalised the applicable GST rates by shifting many services into the standard 18% bracket while retaining concessional rates for select sectors under strict input tax credit (ITC) conditions.
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Key Rate Revisions
The notification pushes multiple services from the earlier 12% GST (6% SGST + 6% CGST) slab to the 18% GST (9% + 9%) bracket. These include:
- Courier and postal services, including local delivery services.
- Goods transport by rail (other than Indian Railways), multimodal transport involving air, and containerised transport.
- Renting of goods carriages where fuel cost is included.
- Professional, business and technical services not otherwise specified.
- Job work related to manufacture of alcoholic liquor and miscellaneous treatment/processing services.
By shifting these sectors into the 18% category, the Council has effectively removed the concessional 12% slab for most service providers, bringing uniformity with the standard service rate.
Concessional 5% Slab Retained (with ITC Restrictions)
Certain high-volume service sectors continue to enjoy the 5% concessional rate (2.5% SGST) but with significant limitations on ITC claims. Examples include:
- Multimodal transport of goods, excluding air as a mode.
- Renting of goods carriages under specified conditions.
- Job work on food products, textiles, hides and skins, newspapers and books, printing of goods attracting 5% or nil GST, and handicrafts.
- Tailoring services.
- Beauty and wellness services under Group 99972, subject to strict denial of ITC on inputs used.
The concessional GST rate has been made applicable to these industries that operate on lower margins and high turnover.
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Clarifications and New Definitions
The Delhi Notification also incorporates important clarificatory provisions aligned with amendments:
Goods Transport Agency (GTA): redefined to exclude e-commerce operators offering local delivery.
Multimodal transporter: formally defined as a principal contractor assuming responsibility for transport across multiple modes.
Recognised sporting events: exempted from the higher rate slab.
Handicraft goods: aligned with earlier exemption notifications.
Clarifications added on the meaning of “premises” in hotel accommodation services, and conditions for registration amendments.
While the present notification has been issued by the Delhi government, it forms part of a coordinated exercise across all States and Union Territories to realign their GST rates as per the national amendments and promulgate requisite notifications effectuating the same.
The revisions mark a decisive rationalisation of GST on services, with businesses in logistics, courier, transport and job work expected to face higher compliance requirements and increased burden of cost, while sectors such as printing, textiles and handicrafts shall continue to benefit from concessional rates though the advantage is curtailed by restrictions on input tax credit.
At the consumer level, the impact will be felt in the form of higher charges for services like courier deliveries and personal care, which now fall under the 18% GST slab.
As has been widely discussed, the alignment of rates removes anomalies between 12% and 18% slabs but increases working capital pressure for service providers who cannot claim ITC under the concessional regime.
As the changes have been put into effect from September 22, 2025, service providers across sectors are recalibrating pricing models, invoicing systems and ITC claims to stay compliant, while end-users must brace for a visible shift in costs.
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