Nav Rathri Beginning to be a New Dawn for GST Rates: Changes to be Effective from 22nd September

The GST Council has announced that the long-awaited changes in GST rates for goods and services will take effect from 22nd September 2025, with the beginning of Navratri. This is the diwali gift from the central government that reduced the GST rate of almost every goods and services.

As per the Council’s recommendation, rate changes for services and for most goods will be implemented from 22nd September 2025.

However, products such as pan masala, gutkha, cigarettes, chewing tobacco (zarda), unmanufactured tobacco, and bidi will continue to be taxed at the existing GST and compensation cess rates until all outstanding loan and interest liabilities under the compensation cess account are cleared.

However, the changes in GST rates of all goods like pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi, will not be implemented on this date.

The goods like Condensed milk, Butter and other fats, Pizza bread, Drinking water packed in 20 litre bottles, Pastry, cakes, biscuits and other bakers’ wares, whether or not containing cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and similar products (other than bread, pizza bread, khakhra, chapathi, roti), Soups and broths and preparations therefor; homogenised composite food preparations..etc has been reduced to 5%.

The government has removed the GST on insurance from 18% earlier, which is the best diwali gift for the citizens. It was a long standing dispute which is now resolved.

The Union Finance Minister, who also chairs the GST Council, will decide the actual date of transition to revised rates for these specified goods at a later stage.

Additionally, the Council has decided that pending amendments to the CGST Act, the Central Board of Indirect Taxes and Customs (CBIC) will begin administrative implementation of a risk-based provisional refund system.

This will allow 90% provisional refunds in cases of inverted duty structure, based on system-driven data analysis and risk evaluation, similar to the mechanism recently approved for zero-rated supplies.