Important GST Updates Effective January 2025
Here are the significant changes in the GST rates and rules effective from January 2025:
- Fortified Rice Kernel (FRK) – GST Rate Reduction: The GST rate on Fortified Rice Kernel (FRK), classifiable under HSN 1904, has been reduced to 5%. This amendment aims to make fortified food products more affordable, supporting health and nutrition initiatives.
- Gene Therapy – GST Exemption: In a significant move towards supporting advanced medical treatments, GST on gene therapy products has been fully exempted. This measure is expected to reduce the cost of these life-saving treatments.
- Food Inputs for Economically Weaker Sections: Concessionary 5% GST rate is now applicable on food inputs under HSN 19 or 21, supplied for food preparations intended for free distribution to economically weaker sections under government programs.
- GST Rate Increase on Used Vehicles: The GST rate on the sale of all old and used vehicles, including electric vehicles (EVs), has been increased from 12% to 18%. This does not apply to vehicles already specified at an 18% rate.
- Specified Premises Definition Updated: Effective from April 2025, “specified premises” will include any premises where the value of supply for hotel accommodation exceeds ₹7,500 per unit per day. Registered persons must file a declaration classifying premises as “specified” using the newly introduced Annexures VII, VIII, and IX.
- Insurance Services by Motor Vehicle Accident Fund: Insurance services provided by the Motor Vehicle Accident Fund under the Motor Vehicles Act, 1988, are now exempt from GST. This update aims to provide financial relief to accident victims without the additional burden of GST.
- Reverse Charge Mechanism (RCM) Adjustments: Sponsorship services provided by body corporates are now under the Forward Charge Mechanism, and businesses registered under the composition scheme are exempt from RCM on renting commercial properties.
The relevant notifications relating to the above are provided below :
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