New Comprehensive GST Rate Schedules Notified by CBIC

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Dated: 10.10.2025

New Comprehensive GST Rate Schedules Notified by CBIC

The Government of India, through the Ministry of Finance (Department of Revenue), has issued Notification No. 9/2025-Central Tax (Rate) on 17th September 2025. This notification, which will come into effect from 22nd September 2025, introduces revised rates of Central Goods and Services Tax (CGST) applicable to various goods. It supersedes the earlier Notification No. 01/2017-Central Tax (Rate) dated 28th June 2017, except for actions already undertaken under the previous notification. Here’s a detailed breakdown of the notification and its implications.

Key Highlights of the Notification

Revised Tax Rates: The notification specifies the CGST rates applicable to intra-state supplies of goods. The rates are categorized into seven schedules, each with a distinct tax rate:
- Schedule I: 2.5%
- Schedule II: 9%
- Schedule III: 20%
- Schedule IV: 1.5%
- Schedule V: 0.125%
- Schedule VI: 0.75%
- Schedule VII: 14%
Scope of Goods: Each schedule lists specific goods along with their corresponding tariff items, sub-headings, or chapters as per the Customs Tariff Act, 1975. The goods are categorized based on their nature, use, and industry.
Pre-Packaged and Labelled Goods: The notification emphasizes the taxation of “pre-packaged and labelled” goods. These are defined as commodities intended for retail sale, containing not more than 25 kg or 25 liters, and requiring declarations under the Legal Metrology Act, 2009.
Supersession of Previous Notification: This notification replaces Notification No. 01/2017-Central Tax (Rate), ensuring that the revised rates align with the current economic and policy framework.
Effective Date: The revised rates and provisions will be effective from 22nd September 2025.

Detailed Breakdown of Schedules

Schedule I – 2.5% 

This schedule includes essential goods such as:

Live horses (Chapter 0101)
Milk and cream, concentrated or containing added sugar (Chapter 0402)
Pre-packaged and labelled curd, lassi, and buttermilk (Chapter 0403)
Dried fruits like cashew nuts, almonds, and raisins (Chapters 0801–0813)
Pre-packaged and labelled cereals like wheat, rice, and maize (Chapters 1001–1008)

Schedule II – 9% 

This schedule covers goods such as:

Artificial honey (Chapter 1702)
Vinegar (Chapter 2209)
Portland cement (Chapter 2523)
Various ores and concentrates (Chapters 2601–2610)
Petroleum products like paraffin wax and petroleum coke (Chapters 2712–2713)

Schedule III – 20% 

This schedule applies to luxury and high-value goods, including:

Aerated waters containing added sugar (Chapter 2202)
Motor vehicles exceeding specific engine capacities (Chapter 8703)
Motorcycles with engine capacities exceeding 350 cc (Chapter 8711)
Yachts and pleasure vessels (Chapter 8903)
Revolvers and pistols (Chapter 9302)

Schedule IV – 1.5% 

This schedule includes precious metals and stones:

Natural or cultured pearls (Chapter 7101)
Gold and silver in unwrought or semi-manufactured forms (Chapters 7106–7108)
Articles of jewelry and parts thereof (Chapter 7113)

Schedule V – 0.125% 

This schedule focuses on rough and unworked precious stones:

Rough diamonds (Chapter 7102)
Precious and semi-precious stones (Chapter 7103)

Schedule VI – 0.75% 

This schedule includes goods not covered under Schedule V:

Goods other than rough diamonds under Chapter 7102
Synthetic or reconstructed precious stones under Chapter 7104

Schedule VII – 14% 

This schedule targets goods like:

Pan masala (Chapter 2106)
Tobacco products (Chapters 2401–2404)

Definitions and Interpretations 

The notification provides clarity on key terms:

Unit Container: A package designed to hold a pre-determined quantity, such as tins, boxes, or cartons.
Pre-Packaged and Labelled: Goods intended for retail sale with specific labeling requirements under the Legal Metrology Act, 2009.
Tariff Item, Sub-Heading, and Chapter: These refer to classifications under the Customs Tariff Act, 1975.

Implications for Businesses

Compliance: Businesses must align their invoicing and tax collection processes with the revised rates. Proper classification of goods under the correct schedule is crucial to avoid penalties.
Impact on Pricing: The revised rates may lead to changes in the pricing of goods. Businesses should assess the impact on their cost structures and communicate price changes to consumers.
Focus on Pre-Packaged Goods: The emphasis on pre-packaged and labeled goods highlights the need for businesses to ensure compliance with labeling and packaging regulations.
Sector-Specific Impact:
- Essential Goods: Lower rates (2.5%) on essential goods will benefit consumers and promote affordability.
- Luxury Goods: Higher rates (20%) on luxury items may impact demand in these segments.

Conclusion

Notification No. 9/2025-Central Tax (Rate) is a significant update to the GST framework, reflecting the government’s intent to streamline tax rates and ensure clarity in the classification of goods. Businesses must carefully review the notification, understand the applicable rates, and ensure compliance to avoid disruptions. With the effective date set for 22nd September 2025, stakeholders have a brief window to prepare for the changes.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: CBIC, Ministry of Finance, Govt. of India

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