Changes in GST Rates for the Service Sector – 56th GST Council
Meeting
The 56th meeting of the
GST Council, held on 3rd September 2025 in New Delhi under the chairpersonship
of Union Finance Minister Smt. Nirmala Sitharaman, has recommended several
important changes in the service sector GST rates. These changes aim to
provide relief to individuals, the common man, and the aspirational middle
class, while also rationalizing taxation in high-value entertainment and gaming
activities. The revised GST rates on services will be effective from 22nd
September 2025.
Services Proposed to be
Exempted – Life & Health Insurance
|
S.
No.
|
Service
Description
|
Earlier
GST Rate
|
Proposed
Change
|
|
1
|
All
individual health insurance, along with reinsurance thereof
|
18%
with ITC
|
Exempted
|
|
2
|
All
individual life insurance, along with reinsurance thereof
|
18%
with ITC
|
Exempted
|
GST Rate Hike – From 28%
to 40%
|
S.
No.
|
Service
/ Activity
|
Earlier
GST Rate
|
Revised
GST Rate
|
|
1
|
Admission
to casinos, race clubs, sporting events like IPL
|
28%
with ITC
|
40%
with ITC
|
|
2
|
Services
by a race club for licensing of bookmakers
|
28%
with ITC
|
40%
with ITC
|
|
3
|
Leasing
or rental services (without operator) of goods attracting higher GST
|
28%
with ITC
|
40%
with ITC
|
|
4
|
Specified
Actionable Claims (betting, casinos, gambling, horse
racing, lottery, online money gaming) – defined as goods
|
28%
with ITC
|
40%
with ITC
|
|
(Corresponding
changes also made in Lottery Valuation Rules)
|
|
|
GST Rate Changes – Other
Services
|
S.
No.
|
Service
Description
|
Earlier
GST Rate
|
Revised
GST Rate
|
|
1
|
Supply
of service of third-party insurance of goods carriage
|
12%
with ITC
|
5%
with ITC
|
|
2
|
Admission
to exhibition of cinematograph films (ticket ≤ ₹100)
|
12%
with ITC
|
5%
with ITC
|
|
3
|
Treatment
of effluents by a Common Effluent Treatment Plant (CETP)
|
12%
with ITC
|
5%
with ITC
|
|
4
|
Treatment/disposal
of biomedical waste by a common facility for clinical establishments
|
12%
with ITC
|
5%
with ITC
|
|
5
|
Hotel
accommodation (value ≤ ₹7,500 per unit per day)
|
12%
with ITC
|
5%
without ITC
|
|
6
|
Professional,
technical & business services relating to exploration, mining,
drilling of petroleum crude/natural gas
|
12%
with ITC
|
18%
with ITC
|
|
7
|
Support
services to exploration, mining or drilling of petroleum crude/natural gas
|
12%
with ITC
|
18%
with ITC
|
|
8
|
Beauty
& physical well-being services (Group 99972)
|
18%
with ITC
|
5%
without ITC
|
Conclusion
The 56th GST Council
Meeting has brought a balanced set of reforms for the service sector. On
one hand, it has reduced rates for essential services like insurance, health,
travel, and cinema, directly benefiting the common man. On the other hand, it
has imposed higher taxes on luxury and speculative services like
casinos, betting, and online gaming, aligning with the government’s revenue and
regulatory objectives.
These changes will be
effective from 22nd September 2025.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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