GST Reform 2025: Essentials to Get Cheaper as Govt Proposes 5% Tax Slab
Introduction: A Landmark Step in GST Reform In a significant development, the Central Government has proposed a major rationalisation of the Goods and Services Tax (GST) structure , aiming to simplify the tax regime and provide relief to the common man. According to government sources, most food items and daily-use products are set to be moved into the lower 5% GST slab , a move expected to boost consumption, improve ease of living, and support India’s GDP growth. Key Proposal: Restructuring GST Slabs The government’s plan involves scrapping the current 12% and 28% GST slabs and consolidating the structure into just two standard rates — 5% and 18% . 99% of items currently in the 12% category are proposed to move into the 5% slab. 90% of goods in the 28% category are set to move into the 18% slab. A new 40% slab will be created exclusively for “sin goods” like tobacco and pan masala . This rationalisation is part of a broader structural reform initiative based on thr...