GST 2.0 Rate Cuts: How Marketplace Sellers Should Update Tax Codes, Prices and Stock

New GST rates for goods and services took effect on 22 September 2025, under notifications dated 17 September 2025. The goods schedule now centres on 5%, 18% and 40%. If you sell on Amazon or Flipkart, you need to check your product tax code and HSN rate, your selling price and MRP, and any stock you bought at the old rate. This is general information, not tax advice; confirm each product's rate with a GST practitioner.

What changed on 22 September 2025?

The government's own summary, published on 4 September 2025 after the 56th GST Council meeting, describes a two-slab structure of 5% and 18% that removes the earlier 12% and 28% rates, with 40% on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts and private aircraft. It says the revised rates apply from 22 September 2025, except for specified tobacco goods where existing rates continue. It lists household goods such as soaps, shampoos, toothbrushes and toothpaste at 5%, and TVs, ACs and dishwashers cut from 28% to 18%. The 40% slab sits apart from the two main slabs, which is why the goods schedule shows three headline rates.

The legal notifications followed on 17 September.

CBIC issued Notification Nos. 9/2025 to 17/2025 under the Central Tax (Rate) and Integrated Tax (Rate) series, all dated 17 September 2025, with the revised rates applying from 22 September 2025. Notification 9/2025 replaced the old schedule of taxable goods with schedules at 5%, 18%, 40% and a few special rates, and it kept separate lower schedules for items such as 3%, 0.25% and 1.5%.

The West Bengal GST Policy Planning Unit's summary lists the movements that matter to online sellers. Its own disclaimer says to check the original notifications for the exact entries.

That table is a selection, not a full list. Several food items, medicines, paper goods and others also moved. Use our GST rate finder and your HSN code to confirm the rate for your product.

What do the Council's FAQs say about invoices, stock and credit?

The Council's FAQ on the 56th meeting answers several questions sellers ask.

• Which rate applies to an old order? The time-of-supply rule in section 14 decides. If goods were supplied before the change and the invoice is issued after it, the time of supply depends on when payment is received or the invoice is issued, whichever is earlier, if payment comes after the rate change.
• Stock in hand: GST is levied on supply, so goods supplied on or after the revised rates take the new rates.
• Credit already in your ledger can still be used to pay output tax. If your outward supply is now exempt, credit must be reversed for supplies made on or after 22 September 2025.
• E-way bills for goods in transit do not need to be cancelled and regenerated.

What did Amazon do about it?

Amazon India launched a GST storefront, called Great Savings Celebration or #GSTBachatUtsav, ahead of its Great Indian Festival, which began on 23 September 2025 with Prime early access from midnight on 22 September. Products showed badges reflecting GST savings. Business Standard also reported that Flipkart rolled out its own GST-focused storefront, GST Bachat Utsav.

For sellers, the key line is that sellers remain responsible for applying the correct GST rates and product tax codes (PTCs), and that Amazon said it was automatically updating GST rates and PTCs on listings only "wherever possible" and for select categories. Amazon also said sellers keep complete control over product pricing, and it offered masterclasses on tax codes. Amazon publishes its detailed seller instructions inside Seller Central, which we could not open for this page.

How do you update tax codes on your listings?

1. Export your catalogue with each SKU's current tax code and HSN.
2. Match each SKU to the new rate using the notification schedules or your accountant's list.
3. Fix every mismatch in bulk through the marketplace's catalogue upload. Do not rely on the auto-update, because it was limited to some categories.
4. Check the apparel and footwear price threshold. A garment priced at ₹2,499 sits in the 5% band and one at ₹2,501 in the 18% band, so a small price change can change the rate.
5. Re-check after any price change, bundle or variation.

A wrong tax code means the customer sees the wrong tax breakdown, and your invoice may not match your return. Your invoice and GSTR-1 figures should come from the same rate.

Should you cut prices after a rate cut?

The law changes the tax, not your price. On Amazon, sellers keep complete control over pricing. There is a business choice to make.

For example, take a TV with a base price of ₹10,000 before tax. At 28% GST the customer paid ₹12,800. At 18% the same base price becomes ₹11,800, a saving of ₹1,000 for the buyer. If you keep the customer price at ₹12,800 instead, your price before tax rises to about ₹10,847, which is ₹12,800 divided by 1.18. That is more margin for you but a worse deal than rivals who passed the cut on.

The MRP is a separate question. Legal Metrology rules govern MRP labels on packaged goods, and we have not confirmed from a primary source how a tax change affects stock already printed with the old MRP. Read our guide on updating prices and MRP after a GST change and check with a Legal Metrology adviser.

What happens to stock bought at the old rate?

The Council's FAQ says credit already in your electronic credit ledger can be used to discharge output tax, and that credit must be reversed only where your outward supply is now exempt. EY's note separately flags that taxpayers may need to assess reversal under section 18(4) of the CGST Act on stock. Whether either applies to your stock depends on your facts, so ask your accountant. The page does not address MRP or transitional rules, so read the full notifications for those.

What should you do before the next big sale?

Treat a rate change like a mini migration. Pick your top 50 SKUs by revenue and check them first, because a wrong code there costs the most. Compare a recent order's invoice with the expected tax line. If you run ads, check that your listing price and the price shown in your campaigns match, since a price change alters conversion and may change your profit per unit. Keep a dated note of what you changed and why, so your accountant can reconcile it at return time.

What do fees and TCS look like after the cut?

Marketplace fees (referral, closing, shipping) carry their own GST at the standard rate, and tax collected at source is calculated on net taxable value. Use the GST TCS calculator to see TCS on a sale at the new rate, and the Amazon seller fees guide for fee mechanics.

FAQ

When did the new GST rates start? The revised rates applied from 22 September 2025, following the 56th GST Council meeting and under notifications dated 17 September 2025.

What are the current GST slabs for goods? The goods schedule centres on 5%, 18% and 40%, with a few special rates such as 3%, 0.25% and 1.5%. The earlier 12% and 28% schedules for most goods were replaced.

Do I have to update my product tax code on Amazon? Yes, sellers remain responsible for correct rates and tax codes, although Amazon said it was auto-updating some categories where it could. Check every SKU anyway.

Is GST on apparel 5% or 18%? It depends on sale value: up to ₹2,500 is 5% and above ₹2,500 is 18%. Confirm the exact basis for your product with your accountant.

Must I lower my selling price after a rate cut? No. On Amazon you control your price. Passing the cut on may help conversion, but it is a margin decision.

Do I need to reverse input tax credit on old stock? It may be needed in some cases under section 18(4). Ask your chartered accountant to check your stock.

Which tool should I use to compute GST? Use our GST calculator for sellers to add or remove GST at any rate, and verify the rate for your HSN code first.

What next?

If your catalogue still carries the old tax codes, fix them before your next sale period. Blooprint's Amazon account management team can run a catalogue and tax-code check across Amazon and Flipkart, working from the rates your accountant confirms.