New GST Reform Announced on September 3, 2025
The Goods and Services Tax (GST) Council introduced key reforms on 3rd September 2025 to simplify compliance, boost transparency, and provide relief to businesses and consumers.
🔑 Major Highlights of GST Reform
✅ E-Invoicing Expansion – Businesses with turnover above ₹5 crore must adopt e-invoicing from October 2025.
✅ Reduced GST on Essentials – Daily-use items such as packaged food, household products, and medicines get GST rate cut to provide relief to common people.
✅ Simplified Returns – A single-page GST return form will be launched, reducing compliance burden.
✅ Digital Tracking of Supply Chains – New AI-enabled system to track fake invoices and curb tax evasion.
✅ GST Compensation – States to receive extended compensation till March 2026.
📌 Impact of the Reform
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For Consumers: Lower prices of essential goods.
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For Businesses: Easier compliance and reduced paperwork.
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For Government: Better transparency, reduced fraud, and higher revenue.
🏛️ Official Statement
Finance Minister highlighted that the reform aims at creating a “simpler, transparent, and taxpayer-friendly GST regime.”
GST Reform Overview (September 2025)
| Category | Items | From | To |
|---|---|---|---|
| Save Big on Daily Essentials | Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, Shaving Cream | 18% | 5% |
| Butter, Ghee, Cheese & Dairy Spreads | 12% | 5% | |
| Pre-packaged Namkeens, Bhujia & Mixtures | 12% | 5% | |
| Utensils | 12% | 5% | |
| Feeding Bottles, Napkins for Babies & Clinical Diapers | 12% | 5% | |
| Sewing Machines & Parts | 12% | 5% | |
| Relief in Healthcare Sector | Individual Health & Life Insurance | 18% | Nil |
| Thermometer | 18% | 5% | |
| Medical Grade Oxygen | 12% | 5% | |
| All Diagnostic Kits & Reagents | 12% | 5% | |
| Glucometer & Test Strips | 12% | 5% | |
| Corrective Spectacles | 12% | 5% | |
| Affordable Education | Maps, Charts & Globes | 12% | Nil |
| Pencils, Sharpeners, Crayons & Pastels | 12% | Nil | |
| Exercise Books & Notebooks | 12% | Nil | |
| Eraser | 5% | Nil | |
| Uplifting Farmers & Agriculture | Tractor Tyres & Parts | 18% | 5% |
| Tractors | 12% | 5% | |
| Specified Bio-Pesticides, Micro-Nutrients | 12% | 5% | |
| Drip Irrigation System & Sprinklers | 12% | 5% | |
| Agricultural, Horticultural or Forestry Machines | 12% | 5% | |
| Automobiles Made Affordable | Petrol & Petrol Hybrid, LPG, CNG Cars (≤1200cc & 4000mm) | 28% | 18% |
| Diesel & Diesel Hybrid Cars (≤1500cc & 4000mm) | 28% | 18% | |
| 3-Wheeled Vehicles | 28% | 18% | |
| Motorcycles (≥350cc & above) | 28% | 18% | |
| Motor Vehicles for Transport of Goods | 28% | 18% | |
| Save on Electronic Appliances | Air Conditioners | 28% | 18% |
| Televisions (above 32", including LED & LCD TVs) | 28% | 18% | |
| Monitors & Projectors | 28% | 18% | |
| Dish Washing Machines | 28% | 18% |
⚙️ Process Reforms:
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Registration: Automatic within 3 working days.
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Refund: Faster provisional refunds with system-based evaluation.