
56th GST Council Meeting: What to Expect in 2025
The 56th GST Council Meeting is expected to bring crucial decisions that can significantly reshape India’s indirect tax framework. With GST revenue stabilizing and legal issues piling up, taxpayers, consultants, and policymakers are closely watching for key reforms.
Let’s break down what to expect — especially on the timing, compensation cess, 12% GST slab, and intermediary services.
Timing of the 56th GST Council Meeting
While no official date is notified yet, Finance Ministry sources indicate the meeting may be scheduled in early July 2025, just ahead of the Monsoon Session of Parliament.
Why this matters:
- Several High Court matters are pending due to lack of GST Tribunal benches
- Amnesty Scheme implementation deadline is approaching
- Legal ambiguities in circulars need urgent review
🗓️ Keep an eye on: Press release at gstcouncil.gov.in
Will the 12% GST Slab Be Removed?
The GST slab rationalisation agenda has been pending since 2021.
Proposed Changes:
Current Slabs | Possible Merge | Impact |
---|---|---|
5%, 12%, 18%, 28% | Remove 12% | Some items shift to 18% or 5% |
Impacted Sectors:
- Processed foods
- Textile and garments
- Packaged goods
Expert View:
“Removing the 12% slab may simplify compliance but could increase costs for small businesses unless carefully calibrated.” — Tax expert at Efiletax
📌 Also read: Latest GST rate changes blog
Compensation Cess: Will States Get More?
The original 5-year compensation to states ended on 30th June 2022. However, compensation cess collection continues till March 2026 (per Notification No. 1/2022-Compensation Cess dated 24.06.2022).
What states want:
- Revival of ad hoc compensation
- Separate discussion on cess sharing formula
Legal Angle:
The Centre had borrowed ₹2.69 lakh crore during COVID under a special window for compensation, raising federal concerns.
Clarity on GST for Intermediary Services
A major litigation area, especially for exporters of BPO and SaaS services.
Current confusion stems from:
- CBIC Circular No. 159/15/2021-GST
- Place of supply rules under Section 13(8)(b) of IGST Act
- Conflicting AAR & High Court rulings
What Industry Wants:
- Redefinition of intermediary under export rules
- Harmonisation with global trade practices
- Avoid classification mismatch for ITES providers
👨⚖️ Delhi HC (W.P. 5566/2023) already flagged the constitutional conflict of intermediary provisions under IGST.
Expert Tip:
Exporters should maintain detailed contract documentation and re-evaluate service agreements pending Council clarification.
Summary
56th GST Council Meeting may address key issues like timing, removal of 12% GST slab, pending compensation to states, and clarity on intermediary services, which could simplify GST and reduce litigation.
FAQs
Q1. What is the likely date of the 56th GST Council Meeting?
A. Expected in early July 2025, but no official date has been notified.
Q2. Will the 12% GST rate be removed?
A. It may be merged with other slabs as part of rationalisation, pending Council consensus.
Q3. Is compensation cess still being collected?
A. Yes, till March 2026, but states are demanding a share of this pool again.
Q4. What is the issue with intermediary services under GST?
A. The definition affects export classification, leading to multiple litigations and industry confusion.
Final Word from Efiletax
The 56th GST Council Meeting could be a turning point for tax simplification and state-Centre coordination. From rate rationalisation to litigation clarity — a lot is at stake.