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
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