The 56th meeting of the GST Council gave the go-ahead to a number of clarifications that have repercussions on a wide range of areas such as medicines, drones, bricks, insurance, hospitality, beauty services, job work, multimodal transport, e-commerce deliveries, and leasing. The information below is a brief, easy-to-comprehend, and ready-to-use compliance guide.
Medicines and MRP Compliance for Existing Stock
Both manufacturers and marketing companies are obliged to revamp the Maximum Retail Price (MRP) reflecting the changed GST rates and distribute updated or supplementary price lists in Form V or VI to dealers, retailers, State Drug Controllers, and the Government. If it is ensured that the new prices are being followed at the retailer level, then there is no need to recall or relabel packs that were released prior to 22 September 2025.
Drones Now at a Uniform Rate
Unmanned aircraft systems such as drones equipped with cameras as well as those for hobby purposes will be charged a standard GST rate of 5 percent. The previous differential rate system of 28 percent or 18 percent for specific categories is thus replaced.
Bricks and the Special Composition Scheme
The special composition scheme for bricks remains the same as before. Bricks besides sand lime bricks have a rate of 6 percent without ITC or 12 percent with ITC, and the threshold of INR 20 Lac applies. Sand lime bricks are instead of 12 percent now rated at 5 percent.
Individual Life and Health Insurance Services
Services of individual life and health insurance provided by insurers are exempt when the insured is not a group. Life insurance covering one person or one person with family is eligible for exemption. The same goes for reinsurance services granted to the insurers. The rest of the input credits are to be reversed in accordance with Section 17.
Hotel Accommodation up to INR 7,500 per Unit per Day
Accommodations with a price of up to INR 7,500 per unit per day attract 5 percent GST without ITC. The option to pay 18 percent with ITC is not available, and this is the compulsory mode of payment. ITC cannot be availed for inputs attributable to these units.
Beauty and Physical Well-being Services
These services are charged 5 percent GST without ITC, and the rate is compulsory. ITC on exclusive inputs cannot be accessed, and common credits get proportionate reversal under Section 17 based on utilization.
Job Work Services
i) Bus Body Building: Taxable at 18 percent with ITC.
ii) Bricks Taxed at 5 Percent: Job work for such bricks is taxable at 5 percent with ITC.
Multimodal Transport of Goods
i) No Air Leg: GST at 5 percent with restricted ITC limited to 5 percent of the value of input services of goods transportation.
ii) With Air Leg: GST at 18 percent with full ITC.
Local Delivery Services via E-Commerce Operators
Local delivery services supplied through an e-commerce operator fall under Section 9(5) when the supplier is not liable to register. In such cases, the operator pays GST at 18 percent. If the delivery is done by a registered person, then GST is to be paid by that person. The term “Goods Transport Agency” does not cover e-commerce operators who are engaged in local delivery services.
Leasing and Renting
i) Without Operator: The tax rate is the same as that for a supply of a like item.
ii) Car with Operator: The choices are to bill at 5 percent with restricted ITC on input services in the same line of business or at 18 percent with full ITC.
Quick View of Key Outcomes
| Topic | Rate and Treatment |
| Medicines MRP | No mandatory recall or relabelling for old stock; revised price lists required |
| Drones | Uniform 5 percent |
| Bricks | 6 percent without ITC or 12 percent with ITC; sand lime bricks at 5 percent |
| Insurance | Individual life and health insurance exempt; reinsurance exempt |
| Hotels ≤ INR 7,500 | 5 percent without ITC, mandatory |
| Beauty Services | 5 percent without ITC, mandatory |
| Job Work | Bus body building at 18 percent with ITC; bricks at 5 percent with ITC |
| Multimodal Transport | 5 percent with restricted ITC (no air leg); 18 percent with full ITC (air leg) |
| Local Delivery | 18 percent; liability on operator under Section 9(5) for unregistered suppliers |
| Leasing | Same as like goods; car with operator: 5 percent (restricted ITC) or 18 percent (full ITC) |
CBIC’s FAQs (Part 2) dated 16/09/2025: Decisions of 56th GST Council Explained
Recommendations dated 03/09/2025: 56th GST Council Meeting
Related Posts:
CBIC FAQs: Decisions of 56th GST Council Explained
CBIC FAQs (Part 3): GST Rate Revision Issues Clarified (56th GST Council)
CBIC FAQs (Part 4/5): GST Rate Revision Issues Clarified (56th GST Council)