With days to go for the new GST rates to come into effect, the finance ministry on Tuesday issues an FAQ to guide users about possible problem areas. Here are some of the questions and answers.

Q: Is it required to recall and re-label MRP on medicines already in the supply chain before 22nd September,2025? How will the re-labelling be implemented?
A: The National Pharmaceutical Pricing Authority (NPPA) vide OMs dated 12.9.2025 and 13.9.2025 have clarified the following:

    All manufacturers/ marketing companies selling drugs/ formulations shall revise the Maximum Retail Price (MRP) of drugs/formulations (including medical devices).

    The manufacturers/ marketing companies shall issue revised price list or supplementary price list, in Form V/VI, to dealers and retailers for display to consumers, and to State Drug Controllers and the Government, reflecting the revised GST rates and revised MRP.

    Recalling, re-labelling, or re-stickering on the label of container or pack of stocks released in the market prior to 22nd September, 2025 is not mandatory, if manufacturer/ marketing companies are able to ensure price compliance at the retailer level.

The OMs are available in the website of the National Pharmaceutical Pricing Authority (NPPA) under Department of Pharmaceuticals:

https://nppa.gov.in/uploads/tender/01da3cf0cd3d17c68c9a63fe23878260.pdf
and
https://nppa.gov.in/uploads/tender/12fbbb0cb337f1d2d70afb3fbcb57f39.pdf

Q: Unmanned aircrafts (Drones) attracted 5%, 18% and 28% GST rate. The 56th GST Council had recommended 5% GST rate on drones. Whether this 5% GST rate will apply to all types of drones?
A: Earlier unmanned aircrafts for personal use attracted 28% GST, unmanned aircrafts with digital camera/video camera recorders attracted 18% GST rate and all other unmanned aircrafts apart from aforementioned categories attracted 5% GST.

The GST council in its 56th meeting held on 03.09.2025 has recommended uniform GST rate of 5% on all the drones.

Q: What is the current GST rate on bricks?
A: A Special Composition Scheme on supply of the bricks (other than sand lime bricks) was implemented w.e.f 1st April,2022 based on the Report of the Group of Ministers on Capacity Based Taxation and Special Composition Scheme which was accepted by GST Council in its 45th meeting held on 17th Sep 2021. Under the scheme, bricks attract GST of 6% without ITC and 12% with ITC with threshold limit for bricks at Rs. 20 lakhs instead of Rs.40 lakhs as is applicable to goods. The GST council in its 56th meeting held on 3rd September, 2025 did not recommend any change on the special composition scheme rates except on sand lime bricks on which GST rate has been recommended to be reduced from 12% to 5%. Hence, all kinds of bricks except sand lime bricks continue to attract GST of 6% without ITC and 12% with ITC with a threshold limit of Rs. 20 lakhs.

Q: What are the insurance services covered within the ambit of the exemption granted to individual life and health insurance?
A: Services of individual health and life insurance business provided by insurers to the insured, where the insured is not a group, are included within the ambit of the exemption. When these services are provided to an individual, or to an individual with his/her family, the same will be exempted.

Q: In addition to exempting services of individual health and life insurance supplied by insurers, will any input services of insurers be also exempted?
A: At present, insurers are availing ITC (input tax credit) on many inputs and input services such as commissions, brokerage and reinsurance, etc. Out of these input services, reinsurance services will be exempted. Input Tax Credit of other inputs or input services is to be reversed because the output services will be exempted.

Q: Do hotels which supply units of accommodation having value less than or equal to Rs 7500/- per unit day have the option of supplying such units at 18% with ITC?
A: Suppliers of hotel accommodation service where the value of a unit of accommodation is less than or equal to Rs 7500/- per unit per day, shall have to charge GST at 5% without ITC on such units. It is a mandatory rate prescribed for such services, and the option to pay GST at the rate of 18% with ITC is not available for such units.

Q: Will hotels supplying units of accommodation having value less than or equal to Rs 7500/- per unit per day be able to avail ITC in relation to such units?
A: The hotels supplying units of accommodation which have value less than or equal to Rs 7500/- per unit per day, shall not be able to avail ITC on such units, as the GST rate prescribed for such supplies is 5% without ITC.

Q: Is the 5% without ITC rate on beauty and physical well-being services mandatory? Can service providers charge 18% with ITC?
A: The 5% without ITC rate on beauty and physical well-being services is mandatory. Service providers do not have the option to charge 18% with ITC on these services.

Q: How should a service provider deal with ITC in cases where GST is payable at a rate of 5% without ITC?
A: In such cases,
    Credit of input tax charged on goods or services used exclusively in supplying such services shall not be taken by the service provider; and
    Credit of input tax charged on goods or services used partly for supplying such services and partly for supplying other taxable supplies shall be reversed by the service provider as if the supply leviable to 5% without ITC is an exempt supply. Consequently, proportionate ITC shall be required to be reversed by the service provider as per Section 17(2) of the CGST Act, 2017 and the rules made thereunder.

For the full FAQs, see here: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2167151