GST Regime Overhaul: Major Tax Cuts Across 90% of Goods
The Goods and Services Tax (GST) Council has approved the most comprehensive restructuring of India’s GST system since its inception in 2017 , cutting taxes on over 90% of goods. The reforms, announced by Union Finance Minister Nirmala Sitharaman after the 56th GST Council meeting , simplify the GST structure into two principal slabs— 5% and 18% , with a special 40% tax rate for luxury and sin goods. The new rates will take effect from September 22, 2025 . Largest Tax Reform Since 2017 The GST overhaul aims to boost domestic consumption at a time when India’s exports are facing global headwinds, especially due to increased tariffs from the United States. Key highlights: Reduction from four slabs (5%, 12%, 18%, 28%) to two slabs (5% and 18%) A special 40% rate for high-end goods and sin products Net revenue implication : ₹48,000 crore based on FY24 consumption data Objective: To stimulate demand, ease compliance, and simplify GST for businesses Centre’s Push for...