New GST Rates on Goods Effective from 22 Sept 2025

Introduction

The GST Council has notified a new GST rate structure on goods, effective from 22nd September 2025, via Notification No. 09/2025-Central Tax (Rate). The revised framework consolidates tax into seven slabs. This change impacts everything from daily essentials to luxury goods, and businesses must realign pricing, invoicing, and IT systems accordingly.

The 7 GST Slabs Explained

Key Implications for Businesses

1. Repricing Needed: Businesses must update product pricing, invoicing, and POS systems as per the new slabs.
2. Supply Chain Impact: Input tax credit calculations may change depending on revised rates of raw materials.
3. Luxury & Sin Goods: Higher slabs (40% and 28%+cess) significantly increase compliance burden on auto, beverages, and tobacco industries.
4. SMEs & Retailers: Small traders dealing in essentials (5%) and industrial intermediates (18%) must adjust billing immediately.
5. Jewellery & Diamonds: Special rates of 0.25%, 1.5% and 3% continue for precious metals and stones — critical for exporters and bullion traders.

Practical Compliance Tips

• Update ERP/Accounting Software before 22 Sept 2025.
• Revise price tags, catalogues, and contracts with the new rates.
• Reconcile stock purchased under old GST rates to avoid mismatch in ITC claims.
• Educate staff and customers — especially in retail — to prevent disputes at billing counters.
• File returns carefully from October onwards to reflect the revised rate structure.

FAQs

Q1. From when do the new GST rates apply?
They apply from 22nd September 2025.

Q2. How many GST slabs are there now?
There are 7 slabs for goods: 0.25%, 1.5%, 3%, 5%, 18%, 28%+cess, and 40%.

Q3. Does this affect services?
No. This notification is for goods only.

Q4. What happens if I bill at old rates after 22 Sept?
It may be treated as short payment of GST, leading to penalties and interest.

Conclusion

The GST rate restructuring is one of the biggest tax reforms since 2017. With effect from 22nd September 2025, businesses across sectors must re-align invoicing, IT systems, and compliance. Staying updated is not optional — it’s the only way to avoid penalties.

NEW GST RATES NOTIFICATION ISSUED FOR GOODS – EFFECTIVE FROM 22ND SEPTEMBER.

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