IMPLICATIONS OF CHANGE IN GST RATE ON GYMNASIUM SERVICES W.E.F 22ND SEP 2025

[Kush Kalra]

Respected Sir/Madam,

The GST council has reduced the GST Rate on Gymnasium services (Beauty and Wellness Services) w.e.f 22.09.2025 from 18% with ITC to 5% without ITC. Following clarification are required for ITC in this case:

1) What will be the treatment of balance in electronic credit Ledger as on 21.09.2025. Should it be reversed or same can be used to discharge the output liability after 21.09.2025.

2) The GST Rate w.e.f from 22.09.2025 is 5% without ITC, If ITC is not used to discharge output liability can we claim refund of this ITC as on 21.09.2025 as same will not be used further.

Regards

Kush Kalra  

AI Summary

Gymnasium GST change: existing ITC cannot be used against 5% no-ITC services; refunds not available.
GST reclassification of gymnasium services to 5% without ITC does not require reversal of valid ITC balances as of 21.09.2025, but such ITC cannot be used against supplies taxed at 5% without ITC nor refunded for that reason. Reversal obligations may apply for capital goods under rule 43 where useful life criteria are unmet. Taxpayers should carry forward and apply remaining ITC to other allowable output tax liabilities or follow statutory reversal rules.