Business
13 Key Points You Need To Know About GST 2.0 As Tax Cuts Kick In From Today 22 September 2025
New Delhi: Ahead of the beginning of GST rejig from Monday, the Finance Ministry issued another detailed explanation of the cut in tax rates on goods and services announced as part of the reforms, which aim to simplify rates, remove anomalies, and make the system easier for both businesses and consumers.
1. Which life insurance policies are covered under the GST exemption?
The exemption applies to all individual life insurance policies, including term plans, endowment policies, and ULIPs. Reinsurance of these individual policies is also exempt.
2. Which health insurance policies are covered under the GST exemption?
Individual health insurance policies, including family floater and senior citizen plans, are exempt from GST. Reinsurance of such individual policies is also exempt under this decision.
3. Will passenger transportation services be taxed at 18 per cent?
No. Passenger transport by road will continue at 5% without ITC, though operators may opt for 18 per cent with ITC. In the case of air travel, economy class is taxed at 5 per cent, while other classes remain at 18 per cent.
4. What is the applicable GST rate on multimodal transport of goods?
If the multimodal transport does not include any air leg, it is taxed at 5 per cent with limited ITC (restricted to 5 per cent of the value). If any portion involves air transport, the applicable rate is 18 per cent with full ITC.
5. Who is liable to pay GST on local delivery services provided through an ECO?
If local delivery services are provided through an e-commerce operator (ECO) by an unregistered person, the e-commerce operator is responsible for paying GST. If the service provider is registered, then that provider is liable to pay the tax.
6. What is the GST rate applicable on local delivery services?
Local delivery services are taxed at 18 per cent.
7. Is it necessary to recall and re-label the MRP on medicines already in the supply chain before September 22, 2025? How will the re-labelling be carried out?
No recall of stock is required. Manufacturers only need to issue revised price lists and share them with dealers, retailers, and regulators. Stock already in the market can continue to be sold, provided billing reflects the new prices.
8. Why haven’t all medicines been fully exempted from GST?
Exempting medicines would prevent manufacturers from claiming ITC on raw materials and inputs, raising their production costs. These costs would eventually be passed on to consumers. Keeping medicines at a concessional 5 per cent rate (except those specified at nil rate) ensures affordability while allowing ITC to flow through the supply chain.
9. Why hasn’t GST been removed on raw cotton?
Cotton is taxed under reverse charge, so farmers do not pay GST directly. This system keeps the input tax credit chain intact for the textile industry, which helps keep costs stable and benefits consumers.
10. What is the tax treatment for leasing or renting services without an operator?
Majority of leasing or renting without operator is taxed at the same rate as the goods themselves. For example, if a car is taxed at 18 per cent, then renting or leasing that car without a driver is also taxed at 18 per cent. The same rule applies to other goods; the tax on renting matches the tax on buying.
11. Will the revised GST rates also apply to imported goods?
Yes. IGST on imports will be levied at the revised GST rates from 22nd September, except where a specific exemption has been provided.
12. UHT (Ultra High Temperature) milk has been exempted. Does this exemption also apply to plant-based milk?
No. The exemption is only for dairy UHT milk. Plant-based milk drinks (like almond milk) earlier attracted 18 per cent GST, and soya milk drinks 12 per cent. Now all plant-based milk drinks, including soya milk, will be taxed at 5%.
13. Why has GST on face powders and shampoos been reduced, and will this not also benefit MNCs and luxury brands?
Face powders and shampoos are common household items used across all sections of society. While premium or luxury brands will also see the benefit, the main purpose of the rate cut is to simplify the GST system. Having separate rates based on brand or price would make the tax structure complicated and difficult to administer.
Business
Tariff jitters: US consumer confidence slips in December; inflation and jobs worries deepen – The Times of India
US consumer confidence weakened in December, sliding to its lowest level since President Donald Trump rolled out sweeping tariffs earlier this year, as households grew more anxious about high prices, trade levies and job prospects, according to a survey by the Conference Board.The Conference Board said its consumer confidence index fell 3.8 points to 89.1 in December from an upwardly revised 92.9 in November, AP reported. The reading is close to the 85.7 level recorded in April, when the Trump administration introduced import taxes on key US trading partners, AP reported.Consumers’ assessment of current economic conditions saw a sharper drop. The present situation index fell 9.5 points to 116.8, reflecting growing unease about inflation and employment conditions. Write-in responses to the survey showed that prices and inflation remained the biggest concern for consumers, alongside tariffs.Short-term expectations for income, business conditions and the labour market were little changed at 70.7, but remained well below 80 — a threshold that can signal a recession ahead. This was the 11th straight month that expectations stayed under that level.Perceptions of the job market also weakened. The share of consumers who said jobs were “plentiful” fell to 26.7% in December from 28.2% in November, while those who said jobs were “hard to get” rose to 20.8% from 20.1%.The softer sentiment follows recent labour market data showing mixed signals. Government figures released last week showed the US economy added 64,000 jobs in November after losing 105,000 jobs in October. The unemployment rate climbed to 4.6% last month, its highest level since 2021.Economists say the labour market is stuck in a “low hire, low fire” phase, as companies remain cautious amid uncertainty over tariffs and the lingering effects of high interest rates. Since March, average monthly job creation has slowed to about 35,000, down from 71,000 in the year ended March. Federal Reserve chair Jerome Powell has said he suspects those figures could be revised even lower, AP reported.
Business
US economy grows at fastest pace in two years
The US economy picked up speed over the three months to September, as consumer spending jumped and exports increased.
The world’s largest economy expanded at an annual rate of 4.3%, up from 3.8% in the previous quarter. That was better than expected, and marked the strongest growth in two years.
The figures offer a clearer picture of the state of the US economy heading into the end of the year, after data collection had been delayed by the US government shutdown.
The report showed consumer spending rising by 3.5%, compared with 2.5% in the previous quarter.
Business
Fish and chip shop offers 100 free Christmas meals in Southampton
“It’s just a way of us giving back to the community,” says a fish and chip shop owner, who is giving away 100 free meals on Christmas Eve.
Raj Khaira, from Southampton, has owned Top Catch fish and chips in Shirley for five years and says he wants to support lonely people in the area.
He says he feels lucky to have a big family but knows for some customers a conversation with a shopkeeper might be the only one they have some days.
He says the shop will give portions of sausage and chips to those in need as a way of “giving back to the people who haven’t got family around them and sometimes can’t afford a hot meal”.
Mr Khaira speaks about working in business all of his life and how much he enjoys meeting “different people every day, from different backgrounds”.
“I’ve done it since I was a young kid so it’s all I really know,” he says.
He adds that many of his customers are elderly and do not have connections over the festive period.
“Christmas for majority of us is probably going to be a joyful and busy day but for some people it’s probably going to be a quiet day,” he says.
After posting about the plans to donate on social media he received a lot of publicity and Mr Khaira is prepared to “probably do more than” 100 meals.
He says the shop has already organised a toy and present drop off to Southampton hospitals this December, with many of the donations coming from customers.
He says: “We’re only where we are as a busy shop because of our community and our lovely customers that come in and sometimes you’ve got to give back and I’m happy to do that.”
Looking back on some of the negative news reported in Shirley earlier this year with the rise in anti-social behaviour in the area, he admits he had suffered.
His shop window was smashed in the summer, but he says: “Christmas time lets us just try and forget that for a minute and just try and have a good time, and reflect back on the year and hopefully next year is going to be a better one.”
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