The GST Council in their recent 56th council meeting made several recommendations relating to changes in GST tax rates, providing relief to individuals, common man, aspirational middle class and measures for facilitation of trade in GST.

1. Date of implementation of rate changes for services and goods (except pan masala, certain tobacco products, etc.,) will be 22nd September 2025.

2. Inclusion of explanations to definition of ‘specified premises’ in the context of taxability of restaurant services: This will provide clarification that a stand-alone restaurant cannot declare itself as a ‘specified premises’ and consequently cannot avail option of paying GST at the rate of 18% with ITC. – Only restaurants considered having specified premises will be provided benefit of selecting either 5% without ITC or 18% with ITC benefit rate of tax, in all other cases, these businesses will have to charge 5% without ITC benefit only.

3. Goods and Services Tax Appellate Tribunal (GSTAT) will be made operational for accepting appeals before end of September and will commence hearing before end of December this year. The Council also recommended date of 30 June 2026 for limitation of filing backlog appeals.

4. Principal Bench of GSTAT will also serve as the National Appellate Authority for Advance Ruling.

5. Supply of local delivery services through Electronic Commerce Operator (ECO) which is currently not notified under section 9(5) for RCM has been proposed to be notified with the condition that person supplying such services through electronic commerce operator is not liable for registration under GST and that the applicable GST rate would be 18%.

6. Amendment in Rule 91(2) of CGST Rules, 2017 to provide for sanction of 90% of refund claimed as provisional refund by the proper officer on the basis of identification and evaluation of risk by the system. Similar relaxation proposed in case of refunds under Inverted Duty Structure.

7. Amendment to section 54(14) of the CGST Act, 2017 to remove threshold limit for refunds arising out of exports made with payment of tax – This will remove the lower limit for granting refunds and will help small exporters making exports through courier, etc.

8. Introduction of optional simplified GST registration scheme wherein registration will be granted on an automated basis within three working days from date of submission of application – This will favour applicants who, based on their own assessment, determine that their output tax liability will not exceed Rs. 2.5 lakh per month

9. Omission of clause (b) of Section 13(8) of IGST Act, 2017. This clause states that the place of supply in case of intermediary services shall be the location of supplier of services. Removal of this clause would mean that going forward, the place of supply of intermediary services would be determined by Section 13(2) i.e., location of recipient of services

10. Post-sales discounts:

a.   To omit section 15(3)(b)(i) of CGST Act, 2017 thereby removing requirement of establishing discount in terms of an agreement entered into before or at the time of such supply and specifically linking of the same with relevant invoices;

b.   To amend section 15(3)(b) and 34 of CGST Act, 2017, to provide that discount should be granted through a credit note

c.    To rescind circular No.212/6/2024-GST dated 26th June 2024 which provided a mechanism for compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers

d.   Council recommended providing clarity on the following issues by way of a circular:

                             i.        non-reversal of ITC due to post-sale discount through financial/commercial credit note;

                           ii.        treatment of post-sale discount provided by manufacturer to dealer as additional consideration, in the transaction between dealer and end-customer;

                          iii.        treatment of post-sale discount as consideration lieu of promotional activities, etc. performed by the dealer.

11. Following are a few important goods and services on which rate of GST has been proposed to be changed by the Council:

However, it is important for the trade to note that all the above are mere recommendations of GST Council and will have no legal effect unless these recommendations are introduced by way of a notification.