The 56th GST Council Meeting held on September 3rd, 2025, in New Delhi marked a significant milestone in India’s tax system. The council adopted a wide range of measures to make the tax system more accessible for taxpayers and businesses.

The GST council decisions signal a complete GST overhaul that involves the introduction of a new rate framework, simplifying the refund process, and compliance. In this blog, we will cover the GST meeting summary and highlights.

What is the GST Council?

The Goods and Services Tax (GST) Council is the constitutional body that decides all matters related to GST in the country. The body is responsible for governing and making recommendations on all matters related to GST.

It was established under Article 279A of the Constitution and is made up of representatives from both the central and state governments. The Union Finance Minister heads the council and includes the finance ministers of all the states and union territories.

The GST Council is responsible for suggesting changes in tax rates, exemptions, regulations, and procedures. It ensures that the GST system is uniform throughout the country and that no state or business suffers unfairly. Every council session helps to adjust the tax structure in line with economic changes and industry requirements.

GST Updates 2025: Key​‍​‌‍​‍‌ Highlights of 56th GST Council Meeting

The 56th GST Council Meeting made numerous announcements and reforms. These were mainly aimed at simplifying the tax structure, rectifying situations from the past, and enhancing the ease of business. Here are the key highlights of the 56th GST Council meeting held on September 3rd, 2025:

1. Two-tier GST Rate Structure

One of the major GST council decisions was the creation of a two-tier GST rate structure that featured 5% for essential goods and 18% for most other goods and services. The GST Council also abolished 12% and 28% slabs.

For a few “demerit goods” like luxury vehicles, soft drinks, and gambling, a 40% rate was introduced. The simplified system aims at reducing the confusion and the number of disputes over classification to make tax compliance easier.

2. Notifications and Effective Dates

On 17th September 2025, the Central Board of Indirect Taxes and Customs (CBIC) issued various notifications implementing these GST amendments. Most of the rules and rates that were new became effective on 22nd September 2025, with the exception of those related to tobacco that will be enforced later.

3. Exemptions and Rate Changes

• The council made the decision to exempt life and health insurance from GST.
• The rates for food grains, dairy, and medicines are reduced to 5%, while the processed foods and manufactured goods were moved to the 18% slab.
• The handicrafts, pottery, and embroidery industries were given relief in the form of a 5% rate.
• Similarly, metals like gold and silver are now taxed at 3%.

4. Simplified Refund and Registration Process

The council also brought an automated and risk-based refund system. Timely system-generated analysis will facilitate faster processing of 90% provisional refunds for exporters and those facing inverted duty structures from 1st November 2025. The council also simplified E-commerce registration for small sellers.

5.​‍​‌‍​‍‌ Appellate Tribunal and Compliance Simplification

The Goods and Services Tax Appellate Tribunal (GSTAT) is expected to start functioning by the end of 2025. Along with this, a Principal Bench will also act as the National Appellate Authority for Advance Ruling to facilitate quick dispute resolution for taxpayers. Apart from the changes in the structure of the local government, there are some other infrastructural changes decided upon, including pre-filled returns and automated refunds.

6. Clarifications and Legal Amendments

One of the most significant changes to the Central Goods and Services Act has been made in Sections 15 and 34, whereby the issues of discounts and credit notes have been resolved. Besides, the place of supply for the services of the intermediary has also been changed to be in line with international norms, thus making it easy for exporters to claim benefits.

Impact of Changes in GST on Taxpayers

GST Council decisions made during the 56th meeting strongly influence both businesses and consumers.

Impact on Consumers

• For consumers, the two-tier simplified rate system will allow them to have a better understanding of the taxes they need to pay on the products they buy.
• Lower GST rates on essential food items, healthcare products, and daily necessities reduce the overall cost burden for consumers.
• Fewer tax slabs make pricing more transparent and easier to understand for buyers.
• Streamlined compliance encourages more suppliers to enter the market, enhancing product availability.
• Stricter E-Way bill and anti-evasion measures lead to more reliable goods movement and fair market practices.

Impact on Businesses

• The introduction of simplified compliance processes allows small and medium enterprises (SMEs) to get their refunds fast and to register as online sellers quickly.
• Consolidation of tax slabs from multiple brackets to mainly 5%, 18%, and 40% reduces calculation errors and paperwork.
• Automated and risk-based GST registration shortens turnaround time for new businesses.
• Enhanced digital return filing systems and mandatory MFA improve security.
• Quicker refunds and better Input Tax Credit (ITC) reconciliation reduce working capital constraints.
• Stricter E-Way bill rules mean better supply chain tracking.
• A 3-year limit on delayed return filing ensures timely tax management and fewer legacy issues.
• Tailored schemes like QRMP facilitate easier tax payments and returns for small businesses.

Trends and Insights from Past Council Meetings

Here are the key trends that are following post-GST Council decisions:

• The meetings looked at rate rationalisation and inverted duty correction, which, in other words, means lessening the differences in taxes for products such as fertilisers, textiles, and footwear.
• The 55th meeting (December 2024) was mostly about the changes in the rates of goods and the compensation cess.
• The 54th meeting was about the integration of E-Invoicing and E-Way bills to make the process error-free.
• There has been a steady push towards the rationalisation to improve ease of compliance.
• The GST Council has improved mechanisms for prompt refunds, grievance redressal and dispute resolution.

What Lies Ahead for Taxpayers and Businesses?

There are several developments to watch out for after the 56th session GST meeting summary:

• Further Automation: Pre-filled returns and automated refund operations for all taxpayers are among the features that the council will introduce to reduce errors and processing times.
• Operationalisation of GST Tribunal: From 30th September 2025, the GST Appellate Tribunal is in a position to start accepting appeals. Hearings are going to be held in December 2025.
• Compensation Cess and New Levies: The council is also planning to replace the current compensation cess, which will end in March 2026.

The GST 2.0 reforms introduced in 2025 through the 56th GST Council meeting mark a historic and transformative step toward simplifying India’s indirect tax regime. The transition to a two-tier rate system and reduced compliance requirements indicate a move towards simplification and equity.

These GST amendments simplify compliance and ensure that India’s tax structure stays progressive. It also helps you maintain proper GST records that you can use as proof of income when you apply for a business loan.

Frequently Asked Questions (FAQs)

1. When will the next GST Council meeting take place after the 56th one?

The 57th GST Council meeting has not taken place yet. The official authorities have not yet announced the exact day, either.

2. Will the two-tier GST rate structure affect existing invoices raised before 22nd September 2025?

Invoices raised before 22nd September 2025 will generally be governed by the GST rates and slab structure applicable at the time of issuance, meaning the previous multi-rate system (including 12% and 28%) continues to apply to those invoices.

3. Are there any changes to GST filing deadlines after the latest meeting?

The council clarified that there are no changes to the schedules for monthly and quarterly filings.

4. How will the automated refund system identify low-risk taxpayers?

Based on data like previous compliance, filing history, and input tax credit claims, the system will generate a risk score, which in turn will be used for identification.

5. What happens if a business doesn’t update its software before the new GST rates apply?

Improper classification and inaccurate tax filing are among the consequences that may call for the imposition of monetary sanctions in case of non-compliance.

6. Do small sellers on E-commerce platforms need separate GST registration?

No. The newly introduced simplified registration scheme enables them to carry out the registration in a single, consolidated, and convenient manner.

7. Are input tax credits affected by the new post-sale discount rule?

Yes, buyers must reverse input tax credit if a discount leads to a reduced taxable value.

8. Will GST on tobacco remain unchanged even after the new rate system starts?

Yes, tobacco products continue at 28% until the government clears pending compensation dues.

9. How will the GST Appellate Tribunal benefit small taxpayers?

It will offer faster and more affordable resolution for disputes without long court delays.

10. Will compensation cess continue after March 2026?

The council is exploring replacing it with a “health and clean energy” cess, but no final decision has been made yet.