Overview

• The 56th GST Council collapsed most levies into 5% and 18% slabs with a special 40% band for selected sin and luxury goods, effective September 22.
• Individual life and health insurance policies are exempt from GST, with transition guidance issued on time‑of‑supply rules, input tax credit reversals for newly exempt items, and no reissuance of e‑way bills for goods in transit.
• Rates on a wide range of everyday items were cut to nil or 5%, footwear and textiles moved to 5%, and cement, small cars, motorcycles up to 350cc, and TVs shifted to 18%, while EVs largely remain at 5%.
• The 40% rate will apply to high‑end vehicles and sugar‑sweetened beverages; tobacco and related products stay at 28% plus cess for now and move to 40% after compensation loans are settled.
• Markets opened higher and business leaders welcomed the simplification, as opposition leaders labeled it a delayed course correction and demanded explicit revenue compensation for states.