GST Council approves two-tier tax structure of 5 per cent and 18 per cent, reforms to take effect from Sep 22

In a landmark decision aimed at rationalising Indiarsquos indirect tax regime the goods and services tax GST Council on Wednesday scrapped the existing fourslab structure and approved a simplified twotier rate system of 5 per cent and 18 per cent effective from September 22GST reforms Full list hereChaired by Finance Minister Nirmala Sitharaman the marathon 56th Council meeting lasted over 10 hours and saw the Centre and states reach consensus on sweeping reforms Bihar Deputy Chief Minister Samrat Choudhary said that all states were on board for the rate rationalisation and it was a ldquoconsensusbased decisionrdquoUnder the revised structure personal care items like hair oil shampoo toothpaste and dental floss will now attract 5 per cent GST instead of 18 per cent Packaged snacks such as namkeens bhujia mixtures and chabena will also move to the 5 per cent slab from 12 per cent providing relief to consumersGST on all TV sets at 18 pc small cars motorcycles up to 350 cc will be charged 18 pc FM SitharamanGST on handicrafts marbles granite blocks to be 5 pc FM SitharamanGST rate on cement to come down to 18 pc from 28 pc tax on threewheelers down to 18 pc from 28 pc FMhellip pictwittercomPtfTQcZzvomdash Press Trust of India PTI_News September 3 2025Conversely the Council has raised the tax on tobacco products including cigars cigarettes cheroots and substitutes from 28 per cent to 40 per cent Goods with added sugar sweeteners or flavours such as aerated waters will also face a steep 40 per cent taxGST Council Meet Updates Individual Health amp Life Insurance are now GST free posts cbic_india NextGenGST pictwittercomWoV9FhfLDRmdash Press Trust of India PTI_News September 3 2025West Bengal Finance Minister Chandrima Bhattacharya said the total loss due to GST rate rationalisation would be Rs 47700 crore while Uttar Pradesh Finance Minister Suresh Khanna said no decision has been taken on the tax incidence on demerit goods and imposing a levy over and above the 40 per cent would be decided laterPrime Minister Narendra Modi had stated in his Independence Day speech that the Central government is proposing significant reforms in GST focused on three pillars of structural reforms rate rationalisation and ease of living The reforms he said would strengthen key economic sectors stimulate economic activity and enable sectoral expansion During my Independence Day Speech I had spoken about our intention to bring the NextGeneration reforms in GST The Union Government had prepared a detailed proposal for broadbased GST rate rationalisation and process reforms aimed at ease of living for the common man and strengthening the economy Glad to state that GST_Council comprising the Union and the States has collectively agreed to the proposals submitted by the Union Government on GST rate cuts amp reforms which will benefit the common man farmers MSMEs middleclass women and youth The wide ranging reforms will improve lives of our citizens and ensure ease of doing business for all especially small traders and businesses he wrotePM Modi narendramodi posts During my Independence Day Speech I had spoken about our intention to bring the NextGeneration reforms in GST The Union Government had prepared a detailed proposal for broadbased GST rate rationalisation and process reforms aimed at ease ofhellip pictwittercompQnmAgQeJKmdash Press Trust of India PTI_News September 3 2025The GST Council also said the new tax regime will provide greater rate stability and improve compliance while easing the cost burden on essential goods and servicesWith IANS and PTI inputs