Table of Contents
Quick Answer
The 57th GST Council made targeted rate and exemption recommendations rather than a slab overhaul: an optional 5% GST with restricted ITC on EV passenger transport and rental, 5% without ITC on delivery services supplied through e-commerce operators, reverse charge and 2% TDS on specified waste and scrap, nil GST on psyllium seeds, and several exemptions. CBIC has begun issuing rate notifications, several effective 1 November 2026; read the exact entry before applying a rate.
What kind of rate changes did the Council make?
The 56th meeting restructured GST rates. The 57th meeting made targeted changes and clarifications. The press release states that the recommendations are given effect through notifications and circulars, which alone carry the force of law, and that FAQs have been issued to clear doubts.
Changes for goods
| Item | Recommendation |
|---|---|
| Sublimation paper | Classified under heading 4809; past cases regularised “as is where is” |
| Toys | Toy entries cover all toys of heading 9503 (dolls, puzzles and others), not only tricycles, scooters and pedal cars |
| Seaweed-extract bio-stimulants registered under the Fertiliser (Control) Order, 1985 | Classifiable under heading 3101 as fertilisers; past cases regularised |
| Second-hand vehicles under the margin scheme | Suppliers may take ITC on inputs and input services other than the second-hand vehicles themselves |
| Waste and scrap of plastics, electrical and electronic waste, tyres, used cooking oil | Reverse charge on supply by an unregistered person to a registered person; 2% TDS on supply by a registered person to a registered person |
| Psyllium seeds (isabgol) | Nil rate, whether fresh, chilled, frozen or dried |
| Re-treaded tractor tyres | Rate aligned with new tractor tyres |
| Compensation cess on Canteen Stores Department sales | Exemption for specified past periods (two and four-wheelers 1 July 2017 to 30 September 2022; aerated drinks 1 July 2017 to 31 March 2022) |
Changes for services
| Item | Recommendation |
|---|---|
| Passenger transport and rental of motor vehicles with operator using electric vehicles | Option to pay 5% with restricted ITC where battery charging cost is included |
| Delivery services through e-commerce operators | 5% without ITC under Section 9(5); GTA exemption for transport of goods to unregistered persons withdrawn for goods supplied or ordered through an e-commerce operator |
| Motor vehicle leasing | Clarification on treatment of registration, road tax, insurance and FASTag recoveries |
| ITC in the same line of business | Limited ITC for restaurant and outdoor catering, hotel accommodation up to ₹7,500 per unit per day, and gym or fitness services |
| Helicopter seat-sharing services to and from North-Eastern States, Sikkim and Bagdogra | Exempt |
| Storage or warehousing of seeds meant for sowing | Exempt |
| Curing of coffee for cultivators | Exempt |
| Seamen’s Provident Fund Organisation services | Exempt |
| Research and development services | Self-certification by the head of institution that the activity is R&D and not consultancy, for the exemption under Entry 44A |
| Foreign shipping lines (import of services from related person without consideration) | Exempt; past period regularised |
| Upfront or concession amount to NHAI under the Toll Operate Transfer model | Exempt |
| Operation and maintenance services under TOT model | Special procedure for valuation and time of payment |
| Funds Transfer Pricing in banks | Notional interest between branches covered by the definition of “interest” |
Examples
- EV passenger transport: A taxi operator using electric vehicles charges a ₹1,000 fare that includes battery charging. If it opts for the 5% rate with restricted ITC, GST is ₹50. It must follow the conditions of the notification.
- E-commerce delivery: A delivery partner who is not liable to register delivers goods ordered through an app and charges ₹40. The e-commerce operator is liable to pay GST of 5% without ITC, which is ₹2.
- Scrap supplied B2B: A registered recycler buys ₹2,00,000 of plastic scrap from a registered dealer. If the recommended 2% TDS applies, the buyer deducts ₹4,000 and deposits it, and files the TDS return. If it buys the same scrap from an unregistered supplier, the recycler pays GST on reverse charge. The recipient must pay even if the supplier is below the registration threshold.
- Psyllium: A trader selling dried isabgol seeds applies a nil rate, as recommended.
How to apply these changes correctly
- Locate the relevant CBIC notification and read the exact entry, conditions and effective date. Several rate notifications are effective from 1 November 2026.
- Update HSN/SAC masters and tax codes in billing software.
- Check reverse-charge liability and TDS registration for scrap transactions.
- For past-period “as is where is” regularisation, check the notification text before changing earlier treatment. Where tax was paid, the FAQs indicate that refund is not given for regularised past periods; read the relevant FAQ and notification.
- Do not apply a Council recommendation as a rate until it is notified.
Related reading: 57th GST Council meeting: key decisions and our GST consultancy and advance rulings practice page.
57th GST Council Meeting: In-Depth Special Series
This statutory analysis is part of our comprehensive 6-part technical coverage of the 57th GST Council recommendations, CGST Rules amendments, and CBIC notifications:
- Part 1:
Pillar: Key Decisions & What Is Already in Force
- Part 2:
Registration: Rule 14B, Biometrics & Cancellation Reforms
- Part 3:
Refunds: 10-Day Acknowledgement, Provisional Sanction & Input Services
- Part 4:
Decriminalisation: Arrest Powers Omission & Penalty Relief
- Part 5:
Returns & ITC: Correction Mechanism, Schema 1.2 & ISD
Frequently Asked Questions
Is there an optional 5% GST rate for electric-vehicle passenger transport?▼
The Council recommended an option to pay GST at 5% with restricted input tax credit on passenger transport and rental of motor vehicles with operator, where the service is supplied using an electric vehicle and the cost of battery charging is included in the consideration.
What GST applies to delivery services through e-commerce operators?▼
The Council recommended bringing delivery services (other than courier and postal) supplied through an e-commerce operator under Section 9(5) where the supplier is not liable to register, at 5% without ITC, and prescribing 5% without ITC for delivery services in relation to goods supplied or ordered through an e-commerce operator.
Is TDS now required on supply of waste and scrap?▼
The Council recommended 2% TDS when specified waste and scrap (plastics, electrical and electronic waste, tyres, and used cooking oil) is supplied by a registered person to a registered person, and reverse charge when supplied by an unregistered person to a registered person.
What is the GST rate on psyllium seeds (isabgol)?▼
The Council recommended nil GST on psyllium seeds, whether fresh, chilled, frozen or dried.
How should I confirm that a recommended rate is in force?▼
Find the corresponding CBIC rate notification (Central Tax (Rate), Integrated Tax (Rate), Union Territory Tax (Rate) or Compensation Cess (Rate)) on the CBIC tax information portal and read its entry number, description and effective date.
Primary Official Sources
CA Amol Gupta, FCA
Chartered Accountants AdvisoryPublished by H A V N & COMPANY (Amol Gupta & Associates). Providing technical analysis on corporate tax planning, entity incorporation, statutory attestation, and regulatory compliance under the ICAI framework.
General Information Only
This article is general information on the law as at its date of publication and is not professional advice. The Income-tax Act, 2025 applies from 1 April 2026; references to the Income-tax Act, 1961 apply to earlier years. Please take advice on your own facts before acting on it.