Archive · 3 Sep 2025
GST Council Meets to Discuss Tax Rate Rationalization
The GST Council, including state and central finance ministers, met to discuss changes to the Goods and Services Tax (GST).
The plan is to reduce the number of tax rates to just two: 5% and 18%.
Some items might have a special 40% tax.
The goal is to make things simpler and possibly lower prices, especially for everyday items.
Some states are concerned about losing revenue, but a report suggests they will gain money.
SBI research predicts states will be net gainers with GST revenue in FY26.
The changes also aim to boost the economy, potentially offsetting any negative impacts.
The GST Council is discussing a shift to a two-slab GST system.
Proposed rates are 5% and 18%, with a 40% rate for certain items.
The current system has four rates: 5, 12, 18, and 28 percent.
SBI projects states will gain revenue in FY26, over ₹14.1 lakh crore.
Opposition-ruled states are concerned about potential revenue loss.
- Who
- GST Council, State Governments, SBI
- What
- GST rate rationalization and compliance measures
- When
- September 2025
- Where
- India
- Why
- To simplify GST structure, potentially boost consumption
Concerns of Some States
SBI and Central Government View
Revenue Impact
Concerns of Some States
Eight opposition-ruled states fear potential revenue losses from GST changes.
SBI and Central Government View
SBI projects states will gain revenue in FY26.
- Meeting Date
- September 3-4, 2025
- Proposed Tax Slabs
- 5% and 18%
- Special Tax Rate
- 40% (on select goods)
- Items with 40% Tax
- Sin goods (tobacco, luxury cars)
- States' Projected Revenue (FY26)
- ₹14.1 lakh crore (minimum)
- Expected Consumption Boost
- ₹52,000 crore (due to rate cuts)
Sources
GST collection grew 6.5% in August, crosses ₹1.86 lakh crore
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