US EditionGST Rejig: Group of Ministers Accepts Centre's Rate Rationalisation Proposal to Scrap 12% and 28% Slabs
The Group of Ministers accepted the Centre's plan to reduce GST slabs from four to two, aiming to ease compliance and tax burden while keeping a 40% rate on select luxury and sin goods.
- On August 21, 2025, the Group of Ministers accepted the Centre's proposal to move to a two-slab GST system, dropping the 12% and 28% tax brackets.
- With the compensation cess regime ending March 31, 2026, the Centre argued the rejig will simplify GST and broaden compliance while easing burdens on households and businesses.
- According to the plan, 99% of items in the 12% bracket will move to the 5% slab, while most products in the 28% bracket will shift down to the 18% slab.
- Several state ministers warned of likely revenue shortfalls, demanded compensation guarantees if revenues dip, and supported a 40% levy on five to seven select 'sin' and luxury items to maintain tax incidence.
- The GoM's report will now go to the GST Council for final approval in its next meeting, likely September, marking one of the biggest reforms since India's GST system was introduced in 2017.
24 Articles
24 Articles
Group of Ministers on GST okays simpler tax structure: Nod for scrapping 12% and 28% slabs
The Group of Ministers on rate rationalisation endorsed the Centre’s plan to introduce a simpler structure, replacing the current 5 per cent, 12 per cent, 18 per cent and 28 per cent rates with just two main slabs— 5% and 18%
States raise revenue loss concerns: GoM backs Centre’s plan for GST rate rationalisation
Six days ago, Prime Minister Narendra Modi, in his Independence Day address, announced the next big phase of reforms under the GST regime by Diwali, a gift for the common man, small entrepreneurs and MSMEs, in terms of reduced tax burden.
GST reforms plan get a leg up with GoM nod
A high-level Group of Ministers (GoM) has approved the Centre's proposal to overhaul the GST regime, paving the way for a simplified two-slab structure. The plan will replace the existing 12% and 28% tax slabs with a leaner system of 5% and 18%, while levying a special 40% rate on sin and luxury goods.
State ministers' panel approves Centre's two-slab GST structure
The Group of Ministers has approved a move to a simplified two-slab structure of 5% and 18%, impacting various goods and services..GST rates, GST rate rationalization, Goods and Services Tax, new GST slabs, ultra luxury goods tax, sin goods tax, GoM GST, tax slab simplification, India tax reform, GST council, impact of GST rates, state ministers GST, GST revenue implications, simplified GST structure, current GST rates
GoM backs GST simplification: Proposal to cut tax slabs to two rates, add 40% for demerit goods - The Tribune
The panel is tasked with reviewing the Centre’s proposal to move 99 per cent of goods currently taxed at 12% to the 5% slab and 90 per cent of goods and services in the 28% slab to the 18% bracket.
The six-member GoM, headed by Bihar Deputy Chief Minister Samrat Choudhary, has accepted the plan to replace the existing four-rate structure of 5, 12, 18 and 28 per cent with two rates.
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