GST 2.0 Next Generation Reform: Streamlined Notifications Issued for GST Rates and Exemptions W.E.F. September 22, 2025

By | November 3, 2025
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GST 2.0 Next Generation Reform: Streamlined Notifications Issued for GST Rates and Exemptions W.E.F. September 22, 2025

Issue: To implement the comprehensive restructuring of India’s Goods and Services Tax (GST) rate system—known as GST 2.0—aimed at simplification, anomaly removal (like Inverted Duty Structure), and alignment with current economic policy.

Facts:

  • The GST Rate Reform 2.0 was implemented through a series of notifications dated September 17, 2025.
  • The effective date for the vast majority of these rate changes and new exemptions was September 22, 2025.
  • The reforms involved restructuring the rates for both goods and services and introducing new exemptions.

Decision:

The Central Board of Indirect Taxes and Customs (CBIC) issued a series of comprehensive notifications (including Notification No. 9/2025 to 17/2025-Central Tax (Rate)) to officially implement the GST 2.0 structure.

Key TakeDowns:

  • Structural Simplification: The reform establishes simplified, uniform rate slabs of 5%, 18%, and 40%, replacing the earlier fragmented structure. Many goods previously at intermediate rates (e.g., 12%) were moved to the 5% slab.
  • New Exemptions (Services): Notification No. 16/2025 introduced crucial exemptions, making individual life and health insurance policies nil-rated.
  • Goods Rate and Exemption Overhaul:
    • Notification No. 9/2025 superseded the original rate notification (1/2017) to introduce the comprehensive revised GST rate schedule for goods (HSN-wise).
    • Notification No. 10/2025 superseded the original exemption list (2/2017) and added Ultra-High Temperature milk, Indian breads, and other basic goods to the exemption schedule.
  • Service Rate Changes: Notification No. 15/2025 updated service rates, confirming options like 5% (no ITC) or 18% (with ITC) for transport services, and reclassifying residuary job work to 18%.
  • E-Way Bill and ITC: No new e-way bills are required for goods already in transit as of September 22, 2025. Input Tax Credit (ITC) accumulated under the old rates remains valid, but ITC related to newly exempt supplies must be reversed.