Business
GST Overhaul From September 22: All Your Questions Answered
New Delhi: The GST Council has rolled out one of the biggest reforms since the introduction of the Goods and Services Tax. From September 22, 2025, India will move to a simplified two-slab system of 5% and 18%, along with a special 40% rate for luxury and sin goods. Everyday essentials such as milk, paneer, and roti have been exempted, insurance has been made tax-free, and costs for construction and farming equipment are being reduced.
But big changes always come with bigger questions. What exactly gets cheaper? What stays the same? How will billing work if you have already made an advance payment? And what about services such as travel, insurance or e-commerce? To cut through the noise, here are answers to the most frequently asked questions on the new GST rates, explained in simpler language.
1. When do the new GST rates apply?
The revised GST rates will take effect across India on September 22, 2025. The only exceptions are tobacco products and gutkha, which will continue under the old regime until further notice.
2. What are the new slabs?
The tax structure has been reduced to two main slabs, which are 5% and 18%. A higher slab of 40% has been introduced for goods such as luxury cars, large SUVs, alcohol substitutes, betting, casinos and other high-end products.
3. What about food items?
Essential food items remain exempt from GST. This includes UHT milk, paneer, pizza bread, chapatti and roti. All of these will now carry no tax.
4. Are insurance policies included?
Yes, both life and health insurance are exempt from GST under the new system. This includes term insurance, ULIPs, family floater health policies and senior citizen health plans.
5. What happens if I supply goods before September 22 but bill after?
The tax rate will depend on the date of payment. If payment is made after September 22, the new rate applies. If it is made before that date, the old rate continues.
6. What about imports?
Imported goods will be taxed at the same GST rates as domestic goods, unless they fall under the exempt category.
7. Can I still use my old input tax credit?
Yes, the input tax credit already available in your ledger will remain valid and can be used to settle future tax liabilities.
8. What if my goods become exempt after September 22?
If your goods are moved to the exempt category after September 22, you will have to reverse any input tax credit claimed on such supplies.
9. Will e-way bills change?
No. The rules for e-way bills remain unchanged. Even if the GST rate changes while goods are in transit, the existing e-way bill will remain valid.
10. Are plant-based milk drinks covered?
Yes, plant-based milk products, including soya milk, will now attract a 5% GST rate.
11. Why a 40% slab for some drinks?
The 40% slab has been created to group similar beverages and avoid classification disputes.
12. What is the GST on medicines?
All medicines are now taxed at 5%, except those that are specifically exempt.
13. What about medical devices?
Medical devices are taxed at 5%, which is lower than earlier rates and is expected to reduce costs for patients and hospitals.
14. What about small cars?
Cars with petrol, LPG or CNG engines up to 1200cc and diesel cars up to 1500cc will now be taxed at 18% instead of 28%.
15. And bigger cars?
Large cars, SUVs and utility vehicles are placed in the 40% slab, as they are considered luxury items.
16. Motorcycles?
Motorcycles with engines up to 350cc will be taxed at 18%, while those above 350cc will attract 40% GST.
17. What about buses and trucks?
Buses and trucks will now be taxed at 18%, which is a reduction from the previous slab.
18. Agriculture equipment?
Agricultural machinery such as sprinklers, drip irrigation systems and harvesters are taxed at 5%, making them more affordable for farmers.
19. Why not exempt tractors?
Tractors have not been exempted because exemptions block input tax credit. Instead, they have been placed under a lower rate to reduce costs while preserving the credit chain.
20. Household items?
Common household items such as soaps, shampoos and talcum powders are taxed at 5%. Toothpaste, toothbrushes, and dental floss also fall under this category.
21. Electronics?
Consumer electronics such as air conditioners, dishwashers and televisions will now attract 18% GST. The 18% slab applies even to larger TVs.
22. Energy sector?
Renewable energy devices are placed under the 5% slab, while coal has been restructured so that there is no additional burden.
23. Hotels and travel?
Hotel rooms priced up to Rs 7,500 per night are taxed at 5%. Bus and train fares are also at 5%. Air travel attracts 5% in economy and 18% in business class.
24. Entertainment?
Casinos, betting and IPL tickets fall under the 40% slab. Other sporting events are taxed at 18% if the ticket price is above Rs 500.
25. What about cinema tickets?
Cinema tickets up to Rs 250 are taxed at 5%, while those above Rs 250 attract 18% GST.
26. How does GST change for education?
Education services such as school tuition remain exempt. Coaching classes and training programmes are taxed at 18%.
27. Will GST apply to hospital services?
Basic hospital services remain exempt, but certain value-added services inside hospitals may attract 18% GST.
28. What about telecom services?
Telecommunication services, including mobile and internet, are taxed at 18%.
29. How are financial services treated?
Financial services such as bank charges and processing fees continue to attract 18% GST.
30. What about insurance renewals?
Renewals of life and health insurance policies are exempt in line with the exemption for insurance products.
31. Is GST applicable on gold?
Yes. Gold jewellery and bullion are taxed at 3%, while jewellery making charges attract 5%.
32. What about real estate?
Under-construction flats are taxed at 5% without ITC. Affordable housing projects continue to enjoy concessional rates.
33. How does GST impact restaurants?
Standalone restaurants and those in hotels with tariffs below Rs 7,500 are taxed at 5%. Restaurants in higher-end hotels may be taxed at 18%.
34. Are services like cab rides affected?
Yes. App-based cab aggregators and regular taxi services are taxed at 5%.
35. What about railways?
Rail passenger fares are taxed at 5%, while freight services attract 12%.
36. How are airlines taxed?
Economy class tickets are taxed at 5%, while business class tickets are taxed at 18%.
37. What about tour packages?
Tour operator services attract 5% GST without ITC.
38. Is GST applicable on e-commerce?
Yes. Goods and services sold via e-commerce platforms are taxed at the same rates as offline products.
39. What about alcohol?
Alcohol for human consumption remains outside GST and continues to be taxed by states.
40. How is tobacco treated?
Tobacco products attract GST along with an additional cess, keeping them in the higher tax range.
41. What about petroleum products?
Petrol, diesel and natural gas are outside GST and continue under excise and Value Added Tax (VAT).
42. How is electricity treated?
Electricity supply remains exempt, as it is considered essential.
43. Are fertilizers covered?
Fertilizers are taxed at 5% to reduce costs for farmers.
44. What about seeds?
Seeds for sowing are exempt from GST.
45. How does GST apply to textiles?
Textiles fall under the 5% or 12% slab, depending on the product.
46. What about footwear?
Footwear priced up to Rs 1,000 is taxed at 5%. Above Rs 1,000, it is taxed at 18%.
47. Are cosmetics affected?
Yes. Cosmetics and beauty products attract 18% GST.
48. What about sanitary napkins?
Sanitary napkins are exempt from GST.
49. How are packaged foods taxed?
Packaged foods like biscuits, chocolates and snacks attract 18%. Unbranded staples remain exempt.
50. What about bottled water?
Packaged drinking water attracts 18% GST.
51. Are aerated drinks included?
Yes. Aerated drinks fall under the 40% slab.
52. How are sweets and confectionery taxed?
Most sweets and confectionery attract 18% GST, though unbranded mithai may remain exempt.
53. What about edible oils?
Edible oils are taxed at 5%.
54. How does GST affect fuel like LPG?
Domestic LPG is taxed at 5%, while commercial cylinders attract 18%.
55. What about kerosene?
PDS kerosene remains exempt.
56. Are books taxed?
Printed books are exempt from GST.
57. What about newspapers?
Newspapers and periodicals are exempt, but advertisements within them are taxed at 5% or 18%, depending on the medium.
58. How is stationery treated?
Stationery such as pens, pencils and notebooks is taxed at 12% or 18%.
59. What about printing services?
Printing of books and newspapers is exempt, while commercial printing attracts 18%.
60. Are digital services taxed?
Yes. Online subscriptions, streaming platforms and cloud services are taxed at 18%.
61. What about software?
Software products and services are taxed at 18%.
62. How are IT services treated?
IT consultancy and related services attract 18% GST.
63. Are exports covered?
Exports are zero-rated, meaning they are exempt from tax but still allow input credit.
64. What about SEZs?
Supplies to SEZs are also zero-rated.
65. How are imports handled?
Imports are taxed at the same rate as domestic supplies, in addition to customs duties.
66. Are charitable trusts exempt?
Charitable trusts remain exempt for their core activities, but commercial services are taxable.
67. What about religious services?
Religious services provided by places of worship are exempt.
68. How are government services taxed?
Most government services are exempt, but commercial activities by government bodies may attract GST.
69. What about lottery and betting?
Lotteries, betting and gambling are taxed at 40%.
70. Are second-hand goods taxed?
Second-hand goods are taxed only on the margin between purchase and resale price.
71. What about real estate resale?
Sale of ready-to-move-in flats or resale properties remains outside GST. Stamp duty and registration fees continue.
72. How are works contracts treated?
Works contracts, including those for government projects, are taxed at 18%.
73. What about transport of goods?
Goods transport by road is taxed at 5% without ITC or 12% with ITC.
74. How does GST apply to courier services?
Courier and logistics services are taxed at 18%.
75. What about financial markets?
Stockbroking, mutual funds and asset management services remain under the 18% slab.
Inflation has risen to 3.4% in the year to December, driven by higher tobacco prices and airfares, according to official figures.
The increase in average prices across the UK economy – the first in five months – was just above expectations, with many economists predicting only a slight uptick to 3.3%.
The cost of airfares was a contributor “likely because of the timing of return flights over the Christmas and New Year period”, the Office for National Statistics (ONS) said. It also reflected an increase in tobacco duty introduced in late November.
It is the last set of monthly inflation figures released before the Bank of England’s decision on interest rates in February.
In addition to tobacco and transport prices, “rising food costs, particularly for bread and cereals, were also an upward driver,” said ONS chief economist Grant Fitzner.
“These were partially offset by a fall in rents inflation and lower prices for a range of recreational and cultural purchases.”
In response to the figures, Chancellor Rachel Reeves said her priority was cutting the cost of living, citing measures in her November Budget including a freeze to rail fares and prescription charges.
“Money off bills and into the pockets of working people is my choice.
“There’s more to do, but this is the year that Britain turns a corner,” Reeves said.
Inflation in the UK is a measure of the Consumer Prices Index, which is a virtual basket of hundreds of everyday goods and services selected by the ONS that includes things like bread, fruit, furniture and different items of clothing.
The prices of these items are tracked by the ONS over the previous 12 months, and the basket is regularly updated to reflect shopping trends.
MUMBAI: AU Small Finance Bank, which has received RBI nod to convert into a commercial bank, reported a net profit of Rs 667.66 crore for the December 2025 quarter, up 26.3% from Rs 528.45 crore in the corresponding quarter last year. The improvement was driven by strong growth in core earnings and a sharp reduction in credit costs, which offset higher operating expenses.Net interest income (NII) rose 15.8% year-on-year to Rs 2,341.27 crore, compared with Rs 2,022.71 crore in the December 2024 quarter. Interest earned increased to Rs 4,727.47 crore from Rs 4,113.48 crore, while interest expended rose to Rs 2,386.20 crore from Rs 2,090.77 crore. On a sequential basis, NII increased 9.2% from Rs 2,144.42 crore in the September 2025 quarter, reflecting improved yields on advances and relatively stable funding costs.During the quarter, the bank also announced a series of board and senior management changes as part of a broader leadership realignment. The board approved the appointment of Phani Shankar as non-executive independent director for a three-year term. It also cleared the appointment of Vivek Tripathi, chief credit officer, as whole-time director, subject to regulatory and shareholder approvals. Uttam Tibrewal, who will complete his current term as whole-time director in April 2026, will continue as deputy CEO, while Divya Sehgal, non-executive non-independent director, resigned after completion of the integration of Fincare Small Finance Bank. V G Kannan is set to complete his second term as independent director in January 2026.Other income increased 17.0% year-on-year to Rs 723.80 crore from Rs 618.41 crore a year earlier, supporting overall revenue growth. Total income for the quarter rose to Rs 5,451.26 crore, compared with Rs 4,731.89 crore in the corresponding period last year.Operating expenses climbed 28.8% year-on-year to Rs 1,849.75 crore from Rs 1,436.21 crore, driven by higher employee costs and expansion-related spending, including regulatory-linked adjustments. Despite this, operating profit before provisions remained broadly stable at Rs 1,215.31 crore, compared with Rs 1,204.91 crore in the year-ago quarter.Provisions (other than tax) declined 34.0% year-on-year to Rs 331.14 crore from Rs 501.68 crore, reflecting lower credit costs. Tax expense increased to Rs 216.51 crore from Rs 174.78 crore, in line with higher profitability.Asset quality remained stable, with gross NPAs at Rs 2,880.54 crore, compared with Rs 2,335.51 crore a year earlier, while the gross NPA ratio was largely unchanged at 2.30% against 2.31% in the corresponding quarter last year. The bank’s capital position strengthened, with the capital adequacy ratio improving to 19.01% from 18.01%, providing headroom for future growth.
Business
‘Our refineries are robust!’: India can process Venezuelean crude oil when available; here’s what IOCL chairman said – The Times of India
Indian Oil Corporation Ltd (IOCL) said that the country’s refineries are capable of processing Venezuelan crude if supplies resume. “If at all things start settling down, if at all a lot of crude starts coming out of Venezuela, then can’t we import oil from Venezuela?” he said.The executive further added that the company, used to process Venezuelean crude a decade back and can do so again. “Venezuelan crude earlier when it was available, like 10 years back or eight years back when it used to be there in the market,” Sahney said at the World Economic Forum (WEF) in Davos.
Speaking about the capabilities of the refineries, the chairman highlighted that they are strong and can process the supplies. “So our refineries are varied, our refineries are robust. They can process in an admixed manner, but we can process Venezuelan crude if and when it is made available.”The remarks follow the US’s capture of outsted Venezuelan President Nicolas Maduro in a military operation and an agreement to send 50 million barrels of oil, worth $5.2 billion, to the interim Venezuelan government.Sahney also highlighted India’s favourable economic and energy landscape. “India is growing at a phenomenal rate, and everybody is interested in talking about doing business with India,” he said.Commenting on global crude prices, he noted, “Crude has been trading in the range of $60-65 per barrel over the past several months. For the better part of the last six months, they were at $60 or below. This is a good zone where economic growth is also happening and sellers of crude are comfortable.”Pointing out India’s reliance on imports, he said, “India remains heavily dependent on imports to meet its energy needs, with IOCL importing about 85-87% of its crude oil requirements. The current price band is supportive for economic stability.”Sahney explained that refining margins depend on more than crude prices. “Refining margin is a very broad term. It is finally affected by the cracks in the international market. Today, cracks are working fine. They have returned to normalcy but are still in a healthy zone,” he said.He added that government policy has also supported the sector. “There is no problem on the policy side. Whatever support is required has already been given. It is up to us to improve profitability by increasing efficiency, reducing costs and optimising the supply chain,” Sahney said.Moving forward, Indian Oil plans to continue investing across the energy value chain, including downstream petrochemicals and cleaner energy solutions.The WEF’s 56th Annual Meeting runs from January 19 to 23, 2026, in Davos-Klosters, with around 3,000 participants from over 130 countries, including world leaders, CEOs, innovators and policymakers, under the theme “A Spirit of Dialogue.”
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