MAJOR GST REFORM – 56th GST Council Update Effective: 22nd September 2025 The GST Council has introduced significant reforms, simplifying the tax structure: Old Structure: 5%, 12%, 18%, 28% New Structure: 5% and 18% (with a special 40% rate) Key Highlights Relief for Common Man: Hair Oil, Shampoo: 18% → 5% Toilet Soap Bars: 18% → 5% Toothbrush, Toothpaste: 18% → 5% Bicycles: 12% → 5% UHT Milk, Paneer: 5% → NIL All Indian Breads: Exempt Food & Beverages: Namkeen, Pasta, Instant Noodles: 12% → 5% Chocolates, Coffee, Butter: 12%/18% → 5% Carbonated Beverages: 28% → 40% Consumer Durables: Air Conditioners: 28% → 18% TVs, Dishwashers: 28% → 18% Small Cars (≤1200cc): 28% → 18% Cement: 28% → 18% Healthcare Breakthrough: Individual Life Insurance: Fully Exempt Individual Health Insurance: Fully Exempt 33 Lifesaving Drugs: Exempt Medical Devices: 18% → 5% Automobiles: Small Cars: 28% → 18% Motorcycles ≤350cc: 28% → 18% Large Cars: 28% → 40% Services Update: Hotel Accommodation ≤ ₹7, 500: 12% → 5% Beauty & Wellness Services: 18% → 5% Air Transport (Non-Economy): 12% → 18% Casino/Betting Services: 28% → 40% Compliance Simplifications: Faster Registration: 3 days for low-risk businesses Quick Refunds: 7-day export refund processing 90% Provisional Refunds for IDS cases GSTAT to be operational by December 2025 Phased Implementation: Services & Most Goods: 22nd September 2025 Tobacco Products: Later (post compensation cess clearance) Revenue Impact: Expected revenue loss: ₹48, 000 crore (to be offset by higher consumption) Action Required: Review product classifications Update pricing strategies Revise customer contracts Plan for cash flow impact Update accounting systems