The Central Board of Indirect Taxes and Customs (CBIC) has issued a set of FAQs providing clarifications on various GST rates and regulations. For medicines and medical devices, the National Pharmaceutical Pricing Authority (NPPA) has clarified that there is no need for mandatory recall or relabeling for stocks released before September 22, 2025. Manufacturers are required to update price lists for dealers and state drug controllers.
Regarding drones, a uniform 5% GST rate is now applicable, replacing the previous rates of 28%, 18%, and 5%. In the bricks sector, the special composition scheme continues with a 6% rate without input tax credit (ITC) and 12% with ITC. Sand lime bricks now have a reduced GST rate of 5% from the previous 12%.
Insurance services, including individual life and health insurance, are exempt from GST, and reinsurance services are also exempt, requiring a reversal of other input ITC. Hotels offering accommodation at or below ₹7,500 per unit per day are subject to a 5% GST without ITC, with no option for an 18% rate. Beauty and well-being services are similarly taxed at 5% without ITC, necessitating ITC reversal for exempt supplies.
For job work, bus body building is taxed at 18% with ITC, while sand lime bricks are at 5% with ITC. Multimodal transport of goods is taxed at 5% with restricted ITC when air transport is not involved, and 18% with full ITC when it is. Local delivery services via e-commerce operators are taxable at 18%, and leasing services are taxed based on the nature of the lease, with options for different rates and ITC conditions.
Below is the summary of the FAQs:
Medicines & Medical Devices:
- National Pharmaceutical Pricing Authority (NPPA) clarified – No mandatory recall/re-labelling for stocks released before 22.09.2025.
- Manufacturers must issue revised price/supplementary price lists (Form V/VI) to dealers, retailers & State Drug Controllers.
Drones:
- Uniform GST rate of 5% applicable on all unmanned aircrafts/drones (earlier rates: 28%, 18%, 5%).
Bricks:
- Special Composition Scheme continues – 6% without ITC / 12% with ITC.
- Threshold for composition: ₹20 lakh (instead of ₹40 lakh).
- Sand lime bricks – GST reduced from 12% to 5%.
Insurance Services:
- Exempt: Individual life & health insurance (including family cover).
- Reinsurance services also exempt. Other input ITC to be reversed.
Hotels (accommodation ≤ ₹7,500/unit per day):
- Mandatory GST 5% without ITC (no option for 18% with ITC).
Beauty & Well-being Services:
- GST rate 5% without ITC – mandatory, no 18% option.
- ITC reversal required for proportionate inputs/services (treated as exempt supply).
Job Work:
- Bus body building – 18% with ITC.
- Sand lime bricks (5% goods) – 5% with ITC.
Multimodal Transport of Goods:
- 5% with restricted ITC – when no air transport involved.
- 18% with full ITC – when air transport involved.
Local Delivery Services via ECO (E-commerce Operator):
- Covered under Section 9(5). GST liability on ECO if supplier is unregistered.
- Taxable @ 18%.
- ECO services not treated as GTA.
Leasing / Renting Services:
- Without operator – taxed at same rate as supply of like goods.
- With operator (e.g. car with driver) – option of 5% with limited ITC (same line of business) or 18% with full ITC.
