The Government of India has announced several important changes to the Goods and Services Tax (GST) framework through various notifications, effective from January 16, 2025. These changes aim to enhance affordability, promote public welfare, and streamline taxation processes across multiple sectors. Below is a summary of these updates:
Notification No. 01/2025 introduces a reduced GST rate of 5% for Fortified Rice Kernel (FRK), replacing the earlier rate of 18%. This move is aimed at promoting better nutrition and making FRK more affordable for consumers.
Effective Date: January 16, 2025
Notification No. 02/2025 has added Gene Therapy under a new entry, S. No. 105A, in the GST exemption schedule. This exemption underscores the government’s focus on encouraging advanced medical treatments and fostering innovation in healthcare.
Effective Date: January 16, 2025
Under Notification No. 04/2025, the GST rate on the sale of old and used vehicles has been increased from 12% to 18%. The taxable value will be determined based on the supplier’s margin:
For registered dealers claiming depreciation under the Income Tax Act: GST will be calculated on the difference between the selling price and the depreciated value.
For others: GST will be calculated on the difference between the selling price and the purchase price.
Effective Date: January 16, 2025
Notification No. 05/2025 redefines the concept of “specified premises” and removes the term “declared tariff” for hotel accommodation services. The new definition of “specified premises” includes:
(a) Premises where hotel accommodation services were provided in the previous financial year with a unit’s supply value exceeding ₹7,500 per day or equivalent.
(b) Premises declared as specified by a registered person filing Annexure VII between January 1 and March 31 of the preceding financial year.
(c) Premises declared as specified by a new registrant filing Annexure VIII within 15 days of receiving their registration acknowledgment.
Opt-Out Option: Those opting out of the specified category must file Annexure IX during the January-March period of the preceding financial year.
Effective Date: April 1, 2025
Notification No. 07/2025 amends the RCM provisions for the following services:
RCM will now apply only to sponsorship services provided by individuals or entities other than a body corporate. Sponsorship services provided by a body corporate will attract GST under the forward charge mechanism.
RCM will apply to the renting of immovable property (other than residential dwellings) provided by an unregistered person to a registered person, excluding those who have opted for the composition levy. Previously, all registered persons receiving such services were covered under RCM.
Effective Date: January 16, 2025
These changes reflect the government’s commitment to aligning GST policies with public interest, industry needs, and economic goals. Businesses and taxpayers should take note of these updates to ensure compliance and optimize their tax planning strategies.
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