Changes of the commodity and services tax rate from September 22, gradually implementation; Check the schedule

The Commodity and Services Tax Council (GST), headed by the Federation’s Minister of Finance, Nermalla Sitraman, approved the implementation of the fee and services tax rates on the goods and services that start on September 22, 2025. This step is part of the broader effort of the government to rationalize the indirect tax structure, reduce the burden of compliance, and expand the scope of relief to families, businesses, and the middle category.

The council decided that changes in the average will be made in a gradual way to ensure stability in revenue flows, especially with regard to obligations under the CESS account.

Under the new schedule, the commodity tax and services rate changes will enter into force as of September 22. Likewise, all goods – which are compatible with some SIN products such as Pan Masala, Gutkha, Sigarettes, Phection Tobacco, Zarda and Non -Manufactured Tobacco, and Bedis – will also turn into new panels of the same date.

However, taxes on these sin commodities will continue to be imposed in current GST rates and compensation until the center scans the loan obligations and the benefits due in the CESS account. The actual date of the transition to these products will be notified later by the Minister of Finance, who also heads the Council.

Services: Reformers and services tax rates will enter into force as of September 22, 2025.

Goods (except for tobacco and allied products): new prices will also be applied from September 22, 2025.

Tobacco and relevant products: The current GST and CESS rates will remain in effect until all loan and interest obligations are wiped under CESS account. The Minister of Finance of the Federation will announce the date for the transfer of these elements at a later stage

On Wednesday, FM NIRMALA SITHARAMAN announced that CESS compensation will now apply to tobacco and relevant products, and imposed above the commodity and services tax rate by 28 % until all suspended loans payments are erased.

She explained that CESS will be withdrawn once the payment is complete, adding that the 40 % tax proposed on SIN is not part of the standard GST frame and will only apply to tobacco products.

In addition to restructuring the prices, the Council approved the administrative changes aimed at simplifying the recovered amounts under the inverted duty structure. Pending the amendments to the CGST law, the Central Council for Innight Taxes and Customs (CBIC) will start implementing a new system for granting 90 % of temporary recovered amounts based on data analyzes and risk assessment. This system is already used in the zero -classified supplies and is expected to reduce liquidity pressure on companies.

The gradual implementation reflects a budget law – that controls immediate relief for consumers and industries while protecting financial needs. Through sequences changes, the government hopes to prevent revenue shocks while fulfilling its reformist promise with the simplest and most predictable GST framework.