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New GST Rates: Here’s What Has Changed After the 25th GST Council Meeting

The council has stated that the government will lose an estimated Rs 1000 crore from these changes.

The government declared yet another major revision of the GST rates after the 25th meeting of the GST Council.

The new cuts affect goods like 20-liter bottles of drinking water, second-hand vehicles, and biodiesel. The council has stated that the government will lose an estimated Rs 1000 crore from these changes. The new rates will take effect from January 25.

The new rates will affect 29 goods and 53 services. On the business front, the meeting agreed to shift towards a more comfortable compliance regime, which will possibly use a single form or invoice.

Also, the Council approved a definition for handicrafts and designated 40 items as the handicrafts.

Here are the new rates:

Union Minister for Finance and Corporate Affairs, Arun Jaitley chairing the 25th GST Council meeting along with Minister of State for Finance, Shiv Pratap Shukla and Finance Secretary, Dr. Hasmukh Adhia, in New Delhi on January 18, 2018. Source: Facebook.

The GST rate on domestic LPG supplied by private distributors was cut from 18 percent to five percent. Consumer items like sugar-boiled sweets and 20-liter water bottles were reduced from 18 percent to 12 percent. Other items like Mehendi paste in cones, and Tamarind kernel powder have had their tax slashed from 18 percent to five percent.

Other ‘experiences’, like theme and water park tickets, go-carting and merry-go-rounds and ballet tickets had their tax rates cut from 28 percent to 18 percent.

There has been a drastic change in services, where a large number of essential services have been exempted from GST tax entirely. Services like education admission, the conduct of examinations, entrance fees for entrance examinations and transportation of students up to higher secondary schools.


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Also, the supply of services for providing information under RTI Act, legal services provided to government, local authority, governmental authority and government entity and transportation of goods from India to outside by air and sea are not exempted from GST.

On the industries front, the GST rate on second-hand medium and large cars and SUVs was cut from 28 percent to 18 percent. The GST on old and used motor vehicles was reduced from 28 percent to 12 percent. The GST on diamonds, precious stones were cut from 3 percent to 0.25 percent. Also, the tax on biodiesel was decreased from 18 percent to 12 percent.

For farmers, tax on items like drip irrigation systems and fertilizer-grade phosphoric acid from 18 percent to 12 percent.

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