FAQs on GST 2.0 implementation date, 40% GST on Non-Alcoholic Beverages answered
The GST Council has given the green signal for a major overhaul of the GST regime with effect from 22nd September 2025. The important changes include slashing tax slabs to 5% and 18%, impacting daily use items. Clarifications were provided on UHT milk (exempt) and plant-based milk (5% GST) and the reason behind 40% rate on 'other non-alcoholic beverages'.
New Delhi: As the GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax regime, several queries related to the implementation of the new tax slabs and the reasons for 40% rate on ‘other non-alcoholic beverages’, why there was a revision of GST rate only on specified varieties of Indian bread, or has the GST on all agriculture machinery / equipment been reduced are doing the rounds.
The GST Council gave the green signal to limit slabs to 5 per cent and 18 per cent with effect from September 22, 2025. The daily-use products - roti/paratha to hair oil, ice creams and TVs will cost less after the new tax rates are implemented. Notably, the GST 2.0 reforms will lead to tax incidence on personal health and life insurance going down to nil.
In this article, we inform you about the common questions being asked by the majority of the people and the response of the government on the same.
When will the changes in GST rates come into effect?
The GST Council stated that the changes in GST slabs rates on services and goods will be effective from September 22, 2025. However, the products including products like zarda, unmanufactured tobacco and beedi, cigarettes, and chewing tobacco will continue to attract the existing rates of GST and compensation cess will continue to apply.
The Council mentioned that new rates will be implemented at a later date to be notified. It will be done after discharging the entire loan and interest liabilities on account of compensation cess.
Does exemption to Ultra High Temperature milk also cover plant-based milk?
The GST Council has cleared the air on the tax on UHT milk, saying it has been exempted from the GST bracket. The new tax rules will ensure that the Plant based milk drinks and soya milk drinks will attract only 5 per cent GST.
Why 40% rate on ‘other non-alcoholic beverages’?
The GST Council announced to levy 40% rate on ‘other non-alcoholic beverages’ to keep similar goods at the same rate to avoid issues of misclassification and disputes.