Hyderabad, September 5, 2025 : The Federation of Telangana Chambers of Commerce and Industry (FTCCI) today convened a Press Conference to deliver its formal response to the key announcements made at the 56th GST Council Meeting held on September 4, 2025.
Addressing the media, Sri R. Ravi Kumar, President, FTCCI, hailed the sweeping GST rate rationalisation as a “landmark step towards a simpler and more inclusive tax regime.” The Council’s decision to merge the 12% and 28% slabs into 5% and 18% categories marks a significant stride in the long-awaited structural simplification of India’s indirect tax system.
Also present were Sri K.K. Maheshwari, Sr. Vice President, Mr. Srinivas Garimella, Vice President, and Mr. Mohd Irshad Ahmed, Chair of FTCCI’s GST and Customs Committee, who highlighted both the opportunities and concerns arising from the new GST
Industry-wide positives, such as the following welcomed:
Cost Relief in Key Sectors: The cut in GST on cement (from 28% to 18%) and the correction of the inverted duty structure in man-made textiles (fibre and yarn now at 5%) are expected to reduce costs and stimulate growth in the construction and textile sectors.
Boost for Agriculture & Manufacturing: Reduction in GST on critical fertiliser inputs like sulphuric acid and ammonia from 18% to 5% will benefit the agri-input sector. A uniform 18% rate on auto parts simplifies classification and reduces disputes.
Enhanced Ease of Doing Business: The provision of 90% provisional refunds for exports and inverted duty cases, along with simplified 3-day registration for low-risk MSMEs, was acknowledged as a major win for liquidity and compliance burden reduction.
Consumer-Focused Measures: GST cuts on everyday essentials such as milk, paneer, butter, soaps, and toothpaste to 5% or NIL, alongside a complete GST exemption on health and life insurance, are expected to boost consumption.
Services Exporters Empowered: The amendment to the place of supply rules for intermediary services was hailed as a long-pending reform, now making Indian service exports effectively zero-rated and globally competitive.
While welcoming, the industry also raised its concerns on some key issues, such as the following
Petroleum Outside GST Still a Stumbling Block:
FTCCI strongly reiterated its long-standing demand for a phased inclusion of petrol, diesel, natural gas, and ATF under the GST regime. The continued exclusion leads to tax cascading and hampers competitiveness, particularly for energy-intensive industries and logistics.
2. Sharp GST Hike on Coal Worrisome:
The sudden increase in GST on coal from 5% to 18% poses serious challenges for sectors like steel, cement, and aluminium, increasing energy costs and risking inflationary pressures. FTCCI urged the Centre to rationalise the existing compensation cess on coal to offset the impact.
3. Break in Input Tax Credit Chain:
The move to reduce GST on hotel accommodation (up to ₹7,500/day) to 5% without ITC was flagged as a concern. FTCCI recommended dual-rate options that allow businesses to claim input tax credit, preserving the seamless credit flow that GST was designed to enable.
The 108-year-old FTCCI, one of the most vibrant and respected regional chambers in India, used the occasion to present critical recommendations to ensure the long-term success and fairness of the GST regime. Recognizing the momentum created by the 56th GST Council Meeting, FTCCI strongly urged the government to:
· Publish a clear timeline for the inclusion of petroleum products—including petrol, diesel, ATF, and natural gas—under the GST framework, a long-standing industry demand to eliminate cascading taxes.
· Offer optional higher GST rates with Input Tax Credit (ITC) for B2B transactions, especially in sectors like hospitality, to preserve the seamless credit chain and prevent input tax leakage.
· Review and rationalize the Compensation Cess on coal, in light of the sharp hike in GST to 18%, to avoid excessive tax burden on energy-intensive and core manufacturing sectors.
· Issue timely clarifications and circulars on the classification of goods and services under the revised GST rate slabs (5%, 18%, and the new 40% slab), to reduce litigation and ensure uniform implementation across states.
FTCCI reiterated that these reforms would enhance transparency, ease of doing business, and competitiveness across sectors, particularly manufacturing, exports, and infrastructure.
