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GST exemption notification updated!

After the 55^th GST Council Meeting, CBIC issued Notification No. 06/2025- Central Tax (Rate) on 16^th January 2025 to make amendments to the list of exemptions under GST.

Let’s understand the changes in detail!

Notification No. 06/2025 - Central Tax (Rate) dated 16.01.2025

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MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 16.01.2025

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Notification No. 06/2025 - Central Tax (Rate)

G.S.R. 41(E).- In exercise of the powers conferred by sub-section (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment further to amend the notification number 12/2017-Central Tax (Rate), of the Government of India, in the Ministry of Finance (Department of Revenue), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June 2017, namely:-

(i) In the said notification, in the table, -

(A) Against serial number 25A, in column (3), for the words "transmission and distribution" wherever occurring, the words "transmission or distribution" shall be substituted;

(B) After serial number 36A and the entries relating thereto, the following serial numbers and entries shall be inserted, namely: -

"(f) A training partner approved by the National Skill Development Corporation,"

(ii) In paragraph 2 of the said notification,-

(A) Item (w) shall be omitted with effect from the 1st day of April 2025;

(B) After item (zj), the following item shall be inserted, namely: -

"(zja) "insurer" has the same meaning as assigned to it in sub-section (9) of section 2 of the Insurance Act, 1938 (4 of 1938).".

[F. No. 190354/2/2025-TO (TRU-II)]

MD. ADIL ASHRAF, Under Secy.

Note:- The principal notification number 12/2017 - Central Tax (Rate) was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 691 (E), dated the 28th June 2017 and was last amended vide notification number 08/2024-Central Tax (Rate) published in the Gazette of India, Extraordinary, vide number G.S.R. 620(E), dated the 8th October 2024.

Key Highlights

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Amendment to Ancillary services in relation to Electricity Transmission and Distribution Services:

In Sr No 25A- Ancillary services to the supply of transmission and distribution of electricity, the words "transmission and distribution" have been replaced with "transmission or distribution".

Exemption for Motor Vehicle Accident Fund Insurance Services:

Services provided by the Motor Vehicle Accident Fund related to third-party insurance contributions made by insurers will be exempt from GST.

Inclusion of National Skill Development Corporation Training Partners:

A new exemption has been introduced for training services offered by partners approved by the National Skill Development Corporation (NSDC).

Omission of Item (w) from Explanations to Notification (Effective April 2025):

Item (w) will be removed from the GST exemption list starting April 1, 2025. It is the definition of a “declared tariff” related to restaurants and hotels.

Definition of "Insurer" Clarified:

The definition of "insurer" is now aligned with the Insurance Act, of 1938, ensuring uniform interpretation across the industry.

Conclusion

The amendments introduced through Notification No. 06/2025 - Central Tax (Rate) signify another step towards refining the GST framework and addressing the evolving needs of various sectors. From enhanced clarity in electricity-related services to targeted exemptions for skill development and motor vehicle accident funds, these changes reflect the government's focus on inclusivity and public welfare. The removal of outdated provisions and the addition of clear definitions further streamline the compliance process. As businesses and stakeholders gear up for the changes, particularly those taking effect in April 2025, staying informed and adapting proactively will be key to leveraging these updates effectively.

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