GST FAQ’s – Key Clarifications on the Decisions of the 56th GST Council Meeting

GST FAQ’s – Key Clarifications on the Decisions of the 56th GST Council Meeting

by | Sep 16, 2025

The Ministry of Finance has issued another set of frequently asked questions (FAQs) on the decisions of 56th GST Council Meeting to provide clarification on certain aspects. The key clarifications are summarized below:

Sector Query Clarifications
Pharmaceutical Is re-labelling of MRP required on medicines for stocks already in the supply chain before 22nd September 2025? How will it be implemented? The National Pharmaceutical Pricing Authority vide OMs dated 12.9.2025 and 13.9.2025 have clarified the following:

  • Manufacturers/ marketers must revise MRPs based on new GST rates and issue updated price lists (Form V/VI) to dealers, retailers, State Drug Controllers, and the Government
  • Revised MRPs must be displayed clearly by retailers
  • Re-labelling/ re-stickering is optional and not required for packs released before 22.09.2025
Construction What is the current GST rate applicable on bricks, and what is the GST rate on job work services related to bricks?
  • All bricks (except sand lime bricks) attract:
    • 6% GST without ITC, or
    • 12% GST with ITC,

    with a lower threshold limit of ₹20 lakhs for registration

  • As per the 56th GST Council meeting, there is no change in the GST rates, except on sand lime bricks where the rate has been reduced from 12% to 5%
  • Job work services related to bricks that attract 5% GST (e.g., sand lime bricks) will also be taxable at 5% with ITC
Insurance What insurance services are exempt under individual life and health insurance, and are any input services also exempt?
  • Individual health and life insurance services provided to an individual or their family (not groups) are exempt
  • Among input services, re-insurance services are also exempt, while ITC on other inputs and services like commissions and brokerage must be reversed since the output insurance services are exempt
Hotel Accommodation Can hotels charging ₹7,500 or less per unit per day opt to pay 18% GST with ITC, and can they avail ITC on such supplies?
  • Hotels supplying accommodation units valued at ₹7,500 or less per unit per day must charge GST at 5% without ITC
  • This is a mandatory rate, and there is no option to pay 18% with ITC. Therefore, ITC cannot be availed on such supplies
Logistics and Transportation What is the GST rate on multimodal transport of goods and the ITC implications?
  • Multimodal transport of goods (using at least two different modes) attracts 5% GST with restricted ITC if no leg involves air transport
  • Under the 5% rate, ITC is allowed only on input services of goods transportation, limited to 5% of the value
  • If any leg of transport involves air, the applicable GST rate is 18% with full ITC on all inputs and input services
E-Commerce Operator (ECO) What is the GST treatment for local delivery services provided through ECOs?
  • Local delivery services are taxable at 18% GST
  • If supplied through an ECO by an unregistered person, the ECO is liable to pay GST under Section 9(5) of the CGST Act
  • If supplied by a registered person through an ECO or directly, the registered supplier is liable to pay GST
  • ECOs providing or facilitating local delivery services are not treated as Goods Transport Agencies (GTA)

Click to download a copy of the FAQs document

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