GST Update - Finoscape

━━━ SECTION 1: LEAD STORY ━━━

Imagine you’re the owner of a shoe store, and you’ve just received a notice from the government about the new GST rates. You’re wondering how this will affect your business and what you need to do to comply. The GST Council has announced new GST rates for certain goods and services, effective May 1, 2026.

The new GST rates will impact various industries, including manufacturing, retail, and services. Consumers can expect to pay more for certain goods and services, while businesses may need to adjust their pricing strategies.

Bare Act

The Central Goods and Services Tax Act, 2017, and the Integrated Goods and Services Tax Act, 2017, have been amended to include the new GST rates. The amended laws will come into effect from May 1, 2026.

The new GST rates will have a significant impact on businesses and consumers. For example, the GST rate on footwear has been increased from 12% to 15%. This means that a pair of shoes that previously cost Rs. 1,000 will now cost Rs. 1,050, including GST.

Expert Corner

According to tax experts, the new GST rates will have a significant impact on businesses and consumers. They advise companies to review their pricing strategies and ensure compliance with the new laws.

Three Things To Do This Week

1. Review your business’s tax strategy to ensure compliance with the new tax rates.

2. Update your pricing strategy to reflect the changes in tax rates.

3. Consult with a tax expert to understand the impact of the new tax rates on your business.

━━━ SECTION 2: SECTION EXPLAINER ━━━

Section Explainer

The GST Council has announced new rates for certain goods and services. The new rates will come into effect from May 1, 2026.

What it says: The new tax rates will apply to goods such as footwear, textiles, and certain food items. The tax rates for services such as hotel accommodation, restaurant services, and health services will also be revised.

What it means: The new tax rates will have a mixed impact on businesses and consumers. While some businesses may benefit from the reduced tax rates, others may face increased costs due to the higher tax rates.

When it applies: The new tax rates will come into effect from May 1, 2026.

Common mistakes: Businesses may fail to update their pricing strategies, leading to non-compliance with the new tax rates. Consumers may not be aware of the changes and may be surprised by the increased costs.

━━━ SECTION 3: OTHER UPDATES ━━━

GST

GST Council Removes Exemptions on Certain Services

The GST Council has announced the removal of exemptions on certain services, including hotel accommodations, effective from October 1, 2026. This move is expected to increase revenue for the government and may impact businesses in the hospitality sector.

GST

GSTR-2B Reconciliation

Every month, thousands of businesses across India claim input tax credit (ITC) based on what they think their suppliers have paid. However, skipping the GSTR-2B reconciliation step can cost businesses ITC, leading to increased costs and reduced profitability.

GST

GST Rule 86B

The 1% cash rule under GST Rule 86B can trip up high-turnover businesses, leading to non-compliance and penalties. Businesses must ensure that they are aware of this rule and comply with it to avoid any issues.

Quick Quiz

What is the new GST rate on footwear, effective from May 1, 2026?

A. 12%

B. 15%

C. 18%

D. 20%

Finoscape Team

India’s Tax Intelligence Hub

Finoscape publishes daily tax intelligence for CAs, finance professionals, and business owners. Educational content only — not legal or tax advice.