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The Goods and Services Tax (GST) Council approves Next generation GST Reforms | Current Affairs | Vision IAS
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The Goods and Services Tax (GST) Council approves Next generation GST Reforms

Posted 04 Sep 2025

2 min read

The 56th meeting of the GST Council recommended several key changes in the GST framework aimed at lowering the tax burden on common people.

Key Reforms Approved

  • Two-rate tax Slab Structure: GST rationalized into 5% (merit rate) and 18% (standard rate). The 12% and 28% slabs are scrapped. (With effect from 22nd September 2025)
  • Cheaper Daily Essentials: Zero GST on milk, paneer, chapati, paratha; 5% on toiletries, medicines, bicycles, farm tools.
  • Relief on Consumer Goods: Small cars, TVs, ACs, and home appliances moved from 28% to 18%.
  • Insurance & Health: GST Exemptions on All life insurance policies & health insurance policies.
  • Higher Tax on Sin Goods: Tobacco, luxury cars, and aerated drinks are now taxed at 40%.
  • Support for Key Economic Sectors
    • Reduced GST on Agricultural machinery and Fertilizer sector, renewable Energy devices and automobile structure.
    • Correction of inverted duty structure on manmade fiber and manmade yarn.
  • Institutional Reforms: Operationalization of Goods and Services Tax Appellate Tribunal (GSTAT) for faster resolution of cases.

About GST Council

  • Constitutional body established under Article 279 (A) of Constitution through 101st Constitutional Amendment Act, 2016.
  • Constituted by the President with the Union Finance Minister as Chairperson.
  • Objective: Responsible for setting tax rates, making policy decisions related to GST and making recommendations to the center and states.
  • Tags :
  • GST
  • GST Council
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