Archive · 21 Aug 2025
GST Rate Restructuring Proposal Endorsed by GoM
The government is planning to change the GST to make it simpler.
They want to have two main tax rates and a higher tax for luxury and harmful items.
Right now, there are different tax rates.
This new plan would have fewer rates.
Essential items like food and medicine would have low or no taxes.
A new 40% rate will be put on things like tobacco.
The final decision will be made by a group of government representatives in September.
GoM endorsed the Centre's GST rate restructuring proposal.
The current GST has rates of 5, 12, 18, and 28 percent, with additional special rates.
The proposal includes a new 40% rate, primarily for luxury and sin goods.
Essential commodities will be taxed at 0% or 5%.
The GST Council will decide on the proposal, expected to meet in September.
- Who
- Group of Ministers, the GST Council.
- What
- Proposed restructuring of GST rates.
- When
- The GST Council is expected to meet in September.
- Where
- India
- Why
- To simplify the GST system and potentially lower rates on some goods.
Impact on the Economy
Centre's Proposal
Overall Effect
Impact on the Economy
Unclear impact on overall economy
Centre's Proposal
Simplification of the GST system.
- Proposed GST Rates
- 5%, 40%, and likely 18%
- Current GST Rates
- 5%, 12%, 18%, 28%
- Goods under 40% rate
- Ultra-luxury and sin goods
- Decision-Making Body
- GST Council
Sources
GST compensation cess: Punjab raises concern over revenue losses, seeks clarity from GoM
GoM accepts proposal to move to 5% and 18% GST rates; GST Council to take final call
Additional levy over 40% on sin/de merit goods proposed: West Bengal FM at GoM meet
Group of Ministers on Rate Rejig endorses Centre’s proposal of two basic rate structure for GST
GST Simplified: GoM Backs 5% & 18% Slabs, Consumers to Gain from Lower Prices
GoM clears two-slab GST: 5% and 18%
GoM nods govt's proposal of two-slab GST of 5, 18%
Group of Ministers accepts proposal to reduce GST slabs to 2 from existing 4
GoM favours 40% GST and cess on luxury goods and tobacco - Policy News
Tax experts welcome proposed two-tier GST, but caution on inverted duty structure
Group of Ministers pushes for major GST reform with 5-18-40% rate structure
GoM Approves Centre's Proposal To Move to Simplified GST Rate Of 5 And 18pc
