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Soon after releasing its first set of Frequently Asked Questions (FAQs) early this month, the Union Government today, September 16, has shared another set of 19 questions on various aspects of the GST Council's key decisions. 

In its meeting on September 3, the GST Council approved the elimination of two GST slabs: 12 per cent and 28 per cent, among other things. From groceries and fertilisers to footwear, textiles, and even renewable energy, a broad basket of goods and services is set to become more affordable after the removal of these two slabs.  

The National Pharmaceutical Pricing Authority (NPPA) vide OMs dated September 12 and September 13 has clarified that all manufacturers and marketing companies selling drugs or formulations shall revise the Maximum Retail Price (MRP) of drugs/formulations (including medical devices). 

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The manufacturers/ marketing companies shall issue a revised price list or supplementary price list, in Form V/VI, to dealers and retailers for display to consumers, and to State Drug Controllers and the government, reflecting the revised GST rates and revised MRP. 

However, recalling, re-labelling, or re-stickering on the label of a container or pack of stocks released in the market before September 22, 2025, is not mandatory if manufacturer/marketing companies are able to ensure price compliance at the retailer level.

Services of individual health and life insurance business provided by insurers to the insured, where the insured is not a group, are included within the ambit of the exemption. When these services are provided to an individual, or to an individual with his/her family, the same will be exempted.

At present, insurers are availing ITC on many inputs and input services such as commissions, brokerage, and reinsurance etc. Out of these input services, reinsurance services will be exempted. Input Tax Credit (ITC) of other inputs or input services is to be reversed because the output services will be exempted.

Suppliers of hotel accommodation service where the value of a unit of accommodation is less than or equal to Rs 7500 per unit per day, shall have to charge GST at 5 per cent without ITC on such units. It is a mandatory rate prescribed for such services, and the option to pay GST at the rate of 18 per cent with ITC.

A 5 per cent GST without ITC rate on beauty and physical well-being services is mandatory. Service providers do not have the option to charge 18 per cent with ITC on these services.

Multimodal transport of goods (where at least two different modes are used by a multimodal transporter) will be taxable as follows:

(a) 5 per cent with restricted input tax credit — i.e., ITC allowed only on input services of transportation of goods, limited to 5 per cent of the value; when no leg of transport of goods is by air. (b) 18 per cent, with full input tax credit, when at least one leg of the transport is by air.

Services by way of local delivery provided through an e-commerce operator (ECO) where the person supplying such services is not liable to register under Section 22(1) will be covered under Section 9(5) of the CGST Act. In such cases, the liability to pay GST will be on ECO.

Supplier of services of leasing/renting a car with operator (for example, driver) will now have the option of charging 5 per cent with ITC of input services in the same line of business or 18 per cent with full ITC.

Also Read- GST Rate Cuts Decoded: Centre shares 75 FAQs simplifying 56th Council meeting decisions

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