New GST rates from Sept 22: Check Top 20 frequently asked questions to avoid confusion

The 56th GST Council meeting has brought significant changes to the Goods and Services Tax (GST) framework, effective 22nd September 2025. To guide taxpayers and businesses, the Central Board of Indirect Taxes and Customs (CBIC) has released 60 FAQs covering rate changes, compliance rules, input tax credit (ITC), and sector-specific clarifications

The Council clarified that while sectors such as small cars, e-vehicles, renewable energy, and construction materials will see rate cuts, items like tobacco products, air conditioners, and large TVs will continue at existing rates. Import duties will also align with revised GST notifications.

Here are the Top 20 Questions and Answers from the FAQs:

1. When will the revised GST rates come into effect?

- From 22nd September 2025 (except tobacco products where cess continues).

2. Has the registration threshold under CGST Act, 2017 changed?

- No, the threshold remains the same.

3. How will the new GST rates be notified?

- Through rate notifications published on the CBIC website.

4. What happens if goods are supplied before the rate change but invoiced later?

- Tax will apply based on the “time of supply” rules.

5. How will advances received before 22nd September be treated?

- They will be taxed as per provisions applicable before the change.

6. Will ITC already availed before the change remain valid?

- Yes, but ITC reversal is needed if supplies later become exempt.

7. What is the impact on imports?

- IGST on imports will apply as per revised notifications.

8. If GST rates are reduced, can ITC from higher earlier rates still be used?

- Yes, ITC once credited can be used to offset liability.

9. What if outward supplies become exempt after September 22 but ITC already exists?

-  ITC reversal will be required as per CGST provisions.

10. Will refund of accumulated ITC under inverted duty structure be allowed?

- Yes, refunds will continue as per Circular No. 135/05/2020-GST.

11. How will GST apply to ongoing contracts when the rate changes?

- Revised rates will apply for supplies made after September 22.\

12. Do e-way bills need to be cancelled and regenerated after rate changes?

- No, existing e-way bills remain valid.

13. What is the new GST rate on small cars?

- Reduced from 28% to 18%.

14. What about GST on utility vehicles exceeding 1500 cc or 4000 mm length?

- They will continue to attract 28% GST plus cess.

15. What is the GST on e-vehicles (3-wheelers)?

- Reduced to 18% from 28%.

16. How are motorcycles above 350cc taxed?

- Attract 28% GST plus compensation cess.

17. Has GST on tobacco products changed?

- No, existing rates and cess continue until loan liabilities are cleared.

18. What is the GST rate on renewable energy devices?

- Reduced to 5% from 12%.

Also Read: GST reforms to directly benefit farmers, traders, middle-class: Odisha CM

19. Has GST on marble and granite slabs been reduced?

- Yes, rationalised to 18% from 28%.

20. What about GST on Air Conditioners and Large TVs?

- No change; they continue to attract 28% GST.