Important Changes in GST from 16th January 2025

Major GST Changes Effective January 2025

1. Fortified Rice Kernel (FRK)

One of the key GST changes January 2025 is the reduction in the GST rate for Fortified Rice Kernel (FRK). Notification No. 01/2025 reduces the tax rate from 18% to 5%, effective from 16th January 2025. This adjustment supports public health by making nutritious food more affordable and accessible to consumers.

2. Gene Therapy – GST Exemption

Notification No. 02/2025 brings another significant update by exempting gene therapy from GST. With the addition of S. No. 105A to the exemption schedule, gene therapy treatments are now GST-free, effective from 16th January 2025. This change highlights the government’s focus on advancing healthcare and ensuring affordable access to cutting-edge medical treatments.

3. GST on Old and Used Vehicles

Under Notification No. 04/2025, the GST changes January 2025 include an increase in the GST rate for old and used vehicles from 12% to 18%.

• For registered dealers, GST is calculated on the difference between the selling price and the depreciated value.
• For others, GST applies to the difference between the selling price and the purchase price.

This change, effective from 16th January 2025, aims to streamline taxation in the used vehicle market, affecting both dealers and consumers.

4. Specified Premises & Declared Tariff for Hotel Accommodation

The hotel industry is also impacted by the GST changes January 2025. Notification No. 05/2025 redefines “specified premises” as follows:

1. Accommodation units priced above ₹7,500 per day in the previous financial year.
2. Premises declared as specified by filing Annexure VII between 1st January and 31st March of the preceding financial year.
3. New registrants declaring premises within 15 days of registration acknowledgment using Annexure VIII.

These changes, effective from 1st April 2025, require hotel operators to take timely action to ensure compliance.

5. Reverse Charge Mechanism (RCM) Updates

Notification No. 07/2025 introduces updates to the Reverse Charge Mechanism (RCM) under the GST changes January 2025:

• Sponsorship Services: RCM now applies to sponsorship services provided by entities other than a body corporate. Services by a body corporate shift to forward charge.
• Renting of Immovable Property: RCM applies to rentals provided by unregistered persons to registered persons, excluding composition levy taxpayers.

These updates, effective from 16th January 2025, add clarity and specificity to RCM provisions.

Key Takeaways for Taxpayers

To comply with the GST changes January 2025, taxpayers must:

• Stay informed about sector-specific updates, such as in vehicles and hotel accommodations.
• File all necessary declarations within the required timelines.
• Adapt to the updated RCM provisions to avoid penalties.

Ignoring these changes can lead to disruptions and financial losses. Staying informed about the GST changes January 2025 ensures smooth operations and compliance.

The GST changes January 2025 represent a significant step towards refining the GST system. By understanding these updates and ensuring timely compliance, taxpayers can avoid penalties and contribute to a more streamlined taxation environment. Staying updated with the GST changes January 2025 is essential for all businesses and individuals operating within the GST framework.