CBIC Notifies GST Rate Changes, Exemptions, and Reverse Charge Updates

17 Jan 2025
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A. Changes with respect to Goods:

i. Change in Rate – Notification No. 01/2025- Central Tax (Rate)
An New Entry No. 98B has been inserted in Schedule I-2.5%, to reduce the GST rate on Fortified Rice Kernels (FRK) classifiable under Heading 1904 from 9%. Therefore, GST rate reduced 5% from 18%.
Amendment in the definition of ‘pre-packaged and labelled’ – To cover all commodities that are intended for retail sale and containing not more than 25 kg or 25 litre, which are 'pre-packed’ as defined under the Legal Metrology Act, or a label affixed thereto is required to bear the declarations under the provisions of the Act and rules.

ii. Exemption on goods – Notification No. 02/2025- Central Tax (Rate)

An New Entry 105A has been inserted in NN 02/2017-CT (Rate) to fully exempt Gene Therapy from GST.

iii. Concessional rate of Tax – NN 03/2025 – CT (R)

Amendment has been made in NN. 39/2017-CT(Rate) where Concessional 5% GST rate had been notified on food inputs of food preparations under HSN 19 or 21 that are supplied for food preparations intended for free distribution to economically weaker sections under a government program subject to the existing conditions.

iv. Change in rate on Sale of all old and used vehicles including electric vehicles (EVs) except categories which already taxed at 18% – NN 04/2025 – CT (R)

Amendment made in NN 8/2018-CT (R), to increase the GST rate from 12% to 18% on sale of all old and used vehicles, including EVs other than those specified at 18%. This is to provide a uniform tax rate of 18% which were previously taxed at 12%, including old EVs bracket when resold by businesses.

B. Concessional Compensation Cess on supply of taxable goods for export – Notification No. 01/2025 – Compensation Cess (Rate)

Scope of Exemption: The notification exempts the intra-state and inter-state supply of taxable goods from the compensation cess. The exemption applies to the extent the cess exceeds 0.1%.

C. Changes with respect to Services:

i. Change in GST Structure on Hotel Accommodation Services – Notification No. 05/2025 – Central Tax (Rate)

A new definition for “Specified Premises” has been introduced, which applies to financial years.

ii. Exemption on Services – Notification No. 06/2025 – Central Tax (Rate)

Exemption on contributions made by general insurance companies from the third-party motor vehicle premiums to the Motor Vehicle Accident Fund ( MVA Fund) – An New Entry 36B has been inserted under NN. 12/2017-Central Tax (Rate).

iii. Changes w.r.t. Reverse charge mechanism on services – Notification No. 07/2025 – Central Tax (Rate)

Sponsorship services provided by the body corporates: Amended Entry No. 4 of NN. 13/2017-Central Tax (Rate) to provide that Sponsorship services provided by the body corporates would be subject to Forward charge. Body corporate has been excluded now in RCM Notification. Earlier, supply of sponsorship by any person to any body corporate or partnership firm located in the taxable territory is chargeable to GST under RCM.

iv. Amendment in NN. 17/2017-Central Tax (Rate) – Notification No. 08/2025 – Central Tax (Rate)

Notification No. 17/2017-Central Tax (Rate) notifies the categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator.

Source :

CBIC Notifies GST Rate Changes, Exemptions, and Reverse Charge Updates

CBIC Notifies GST Rate Changes, Exemptions, and Reverse Charge Updates

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