INPUT TAX CREDIT ITC
One clear benefit, four open questions: GST reform delivers a win for consumers but at what cost?
Recent GST reforms in India, eliminating the 28% and 12% slabs, aim for a simpler tax structure and fairness, potentially boosting the economy modestly. While the move may simplify some aspects, complexities persist, and concerns arise about long-term fiscal stability due to significant revenue losses.
GST reductions to boost cooperatives, farmers, rural enterprises
The Ministry of Cooperation reports that recent GST reforms will strengthen the cooperative sector, enhance product competitiveness, and boost rural entrepreneurship. Rate reductions benefit farming, animal husbandry, and food processing, making essential goods more affordable. Dairy farmers and consumers receive direct relief through exemptions and lowered taxes on related products, promoting sustainable practices and increasing incomes for cooperatives.
GST on health and life insurance premiums reduced to zero: See how it will impact your policy costs
New GST Rates on Life and Health Insurance: The Goods and Services Tax (GST) on health and life insurance premiums will soon be zero. The GST Council approved this change in its recent meeting. This new rule starts on September 22, 2025. While premiums will not have GST, insurers may not get input tax credits. Experts say this could lead to a slight increase in costs.
Travel industry packs its bags for a festive takeoff
The GST cuts on hotel tariffs and dining are expected to boost the travel and hospitality industry during the festive season, following a weak first quarter impacted by various incidents. With reduced prices, companies like Treebo anticipate increased bookings, aligning with the peak travel period of Navaratri and Diwali.
How will the recent GST changes affect different sectors of the economy?
GST slab rationalization is set to spur consumption and economic growth. Automobile, cement, and consumer goods sectors are likely to benefit. Two-wheeler makers with higher than 350 cc bikes may face negative impact. Retail-focused lenders could see improved credit demand. Renewable energy companies may gain from GST reduction on solar cells.
State-run insurers likely to roll out zero-tax policies
India's state-run insurers are set to introduce zero-tax individual policies to broaden insurance coverage, following a government decision to exempt individual insurance purchases from GST. While this move aims to lower premiums, the unavailability of input tax credits may initially squeeze insurer profitability. Insurers are exploring cost-cutting measures to mitigate the impact and ensure the benefits reach consumers.
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Big cheer for homebuyers! Homes may get cheaper with lower GST on cement
The government's decision to lower the GST on cement from 28% to 18%, effective September 22, 2025, is expected to reduce housing construction costs. Experts predict a 5-7% decrease in overall project expenses, particularly benefiting affordable and mid-income housing. Notably, cement is a crucial construction material, contributing between 10-12% of construction costs.
Tourism Boost: GST on hotel room tariffs under ₹7,500 cut to 5%
The Goods and Services Tax (GST) Council has decided to reduce tax rates on hotel rooms costing up to Rs 7,500 per day. The new rate is 5% without input tax credit. This decision aims to benefit budget and mid-market travelers. Nikhil Sharma from Radisson Hotel Group believes this will boost domestic tourism.
Freight tax cut to drive logistics
Earlier, this was taxed at 12% with ITC. For road haulage, renting of goods carriages with operators, where fuel is included, now attracts 5% instead of 12%. Third-party insurance of goods carriages too moves down to 5% from 12%, reducing vehicle running costs for fleet operators. Goods Transport Agency services, widely used in bulk cargo movement, have been revised from 5% without ITC or 12% with ITC to 5% without ITC or 18% with ITC.
Pay more for IPL matches; movie tickets under ₹100 get cheaper
The GST Council has raised tax on sporting events like IPL to 40% while easing levies on cinema tickets under ₹100, now taxed at 5%. Higher-priced movie tickets remain at 18%. The move balances revenue from marquee sports with relief for small-ticket entertainment, despite industry calls for broader cuts.
GST on salon services & health clubs: Did your beauty treatment get cheaper?
Good news for salon-goers! The GST Council has slashed the tax on beauty and wellness services, including salons and health clubs, from 18% to 5%. This reduction aims to make these services more affordable for consumers. Additionally, GST rates on personal care products like soaps and shampoos have also been reduced to 5%, easing the financial burden on households.
GST 2.0: Tax cuts offer hope, but not a cure for Trump’s 50% tariff blow to exporters
The GST Council, chaired by Finance Minister Nirmala Sitharaman, on Wednesday rationalised the tax structure by moving most items from the 12% and 18% brackets to 5%.
GST impact: Like premium air travel tickets, will premium railway tickets cost more after GST 2.0?
Get ready for changes in Goods and Services Tax or GST on air travel. From September 22, 2025, premium air tickets will cost more with an 18% GST. Economy class tickets will remain at 5%. Train tickets will not change. AC and premium train tickets will continue with a 5% GST. Non-AC train travel will remain exempt from GST.
Insurance companies bear the burden of GST exemptions, have to reverse accumulated ITC
Following GST revisions, individual life and health insurers face the burden of reversing Input Tax Credit accumulated until September 21, 2025. While policyholders benefit from premium exemptions starting September 22, insurers must reverse unutilized credits, impacting their finances. Experts suggest a phased reversal or refund mechanism to balance consumer benefits and industry sustainability.
GST 2.0: A game-changer for Indian real estate
The forthcoming GST reforms, set to take effect on September 22, 2025, promise to deliver a significant boost to India’s residential, retail, and office real estate sectors.
GST reforms: Oil & gas margins to compress as GST on exploration hiked to 18%
The GST Council's decision to raise the tax on oil and gas exploration and production services to 18% from 12%, effective September 22, will increase production costs. Experts warn this move, coupled with moderating oil and gas prices, will compress corporate margins and make E&P projects less competitive, potentially hindering domestic output.
GST 2.0 explained: When will new GST rate for life, health insurance be applicable?
In a significant move, the GST Council announced on September 3, 2025, that individual life and health insurance premiums will be exempt from GST. The council also reduced GST rates on medicines to a concessional 5%, aiming to lower healthcare costs.
GST 2.0: Watching Virat Kohli and Shubman Gill in IPL just got costlier, placed with non-essential & luxury items
Watching IPL matches from the stadium is now more expensive due to a revised GST structure, increasing ticket prices to 40%. This places IPL tickets in the highest GST slab, alongside casinos and luxury goods, significantly impacting cricket fans. While regular cricket matches remain at 18%, IPL and similar premium leagues are uniquely affected by the higher rate.
KISSing those crazy GST slabs bye
The GST Council has streamlined the tax structure, introducing a 0%, 5%, 18%, and 40% tier system, eliminating the 28% slab except for luxury items. While many goods and services now fall under the 5% and 18% categories, a 40% 'sin' tax on certain items remains. Hotel tariffs below ₹7,500 will be taxed at 5%.
Will insurance premiums become cheaper in GST 2.0?
The GST Council has eliminated the 18% tax on health and life insurance premiums, a move under PM Modi's GST 2.0 reforms aimed at simplifying the tax structure. This exemption is expected to lower premiums, potentially boosting demand and increasing insurance accessibility for a wider population, though insurers may face short-term margin pressures.
GST cut on insurance premiums may lower costs, insurers brace for near-term impact: Report
The GST Council is considering GST rate cuts on health and term insurance, potentially lowering premiums for policyholders. While a full exemption could reduce premiums significantly, it may lead to a revenue shortfall for the government.
Restaurants body writes to govt for rationalisation of GST rates
The National Restaurants Association of India asks the government to rethink GST rates. Restaurants face high costs from rent, aggregator commissions, and marketing. They pay 18% GST on rent without input tax credit. Food delivery platforms contribute significantly to revenue. NRAI suggests lower GST for certain products.
SBI to states: Don’t fear PM Modi’s Diwali GST gift, you’ll still be net gainers
State Bank of India projects Indian states will remain net gainers from GST, even with rate rationalisation, due to revenue sharing mechanisms. This contradicts concerns of revenue loss expressed by some states. The bank suggests utilising the compensation fund surplus to offset potential losses from rate adjustments.
NBDA seeks GST relief to ease financial strain on news broadcasters
The News Broadcasters & Digital Association (NBDA) has appealed to the Finance Minister Nirmala Sitharaman, requesting revisions to the GST framework. They seek a shift in the point of taxation for advertising revenue from invoicing to actual receipt, especially concerning government agencies.
ATMA urges govt to not treat tryes on par with luxury product, calls for 5 pc GST
Automotive Tyre Manufacturers Association requested the government to reduce GST on tyres. They want the rate to be five percent instead of twenty-eight percent. ATMA argues tyres are essential for transportation, agriculture, and other key sectors. A lower GST would help small businesses and farmers. It would also reduce vehicle operating costs.
FAI seeks cut in GST rates for fertiliser raw materials, refund of accumulated input tax credit
The Fertiliser Association of India (FAI) has urged the government to reduce GST rates on key raw materials like ammonia and sulphuric acid from 18% to 5%. Citing a meeting with Finance Minister Nirmala Sitharaman, FAI also requested a refund of accumulated input tax credit for manufacturers due to the non-taxable subsidy component.
Drug, medtech companies fear GST changes may squeeze funds
Pharma and medtech sectors are concerned about upcoming Goods and Services Tax changes. They anticipate higher operating costs and working capital issues. Rajiv Nath suggests a balanced GST approach for equipment and consumables. Federation of Pharma Entrepreneurs urges lower GST on APIs to avoid inverted duty structure. MSMEs fear blocked funds and slowed growth due to tax imbalances.
Food Ministry forwards veg oil GST refund request to Finance Ministry
The food ministry has urged the finance ministry to lift GST refund restrictions on vegetable oils, a move impacting SMEs due to inverted duty structure. The GST Council is expected to consider this issue in its next meeting.
GST exemption could take a toll on insurers' health
In protection products, commissions initially range between 35% and 40% before tapering off, averaging about 5-6% over time. On top of this, insurers incur about 10% in other expenses. Currently, service tax of around 2% on such costs is offset through input tax credits. If GST exemptions remove that credit, insurers will have to bear the additional expense.
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