Wed Sep 03 05:30:00 UTC 2025: ## GST Council to Revamp Tax Slabs, Bringing Price Changes to Everyday Goods

**New Delhi:** Consumers can expect a significant shakeup in prices of various goods as the Goods and Services Tax (GST) Council is set to finalize a revamp of the current tax slab structure. A meeting held on September 3rd and 4th is expected to pave the way for a reduction in the number of tax slabs from the existing four to two, aligning with Prime Minister Modi’s appeal for providing relief to citizens.

Currently, India has four GST slabs: 5%, 12%, 18%, and 28%. The proposed changes aim to eliminate the 12% and 28% slabs, consolidating items into the 5% and 18% categories. This move will significantly impact the prices of numerous goods, both upwards and downwards.

**What’s Expected to Become Cheaper:**

The government is reportedly considering reducing GST rates on approximately 175 items. Essential goods and items used by the common citizen are likely to see price reductions. Key categories expected to benefit include:

* **Footwear and Apparel:** GST on footwear and clothing could drop from 12% to 5%.
* **Essential Food Items:** Items like ghee, butter, and dry fruits could see a reduction from 12% to 5%.
* **Medicines:** GST on medicines is expected to be lowered to 5%.
* **Education:** Items like pencils, cycles, maps, and globes could also become more affordable.
* **Other essentials:** cycles, umbrellas, carpets, readymade garments, tyres, fertilizers, shampoo, soaps and toothpastes could get a tax break.
* **Small Cars:** Tax can be cut from 28% to 18% for smaller cars

**What’s Expected to Become More Expensive:**

While the focus is on providing relief, certain categories, particularly luxury and “demerit” goods, are likely to face increased taxation.

* **Luxury Goods:** A special tax rate of up to 40% could be levied on items like luxury cars, alcoholic beverages, tobacco products, and sugary drinks.
* **Other increases:** Chemical wood pulp, gas mining services, and business class air tickets will be moved to an 18% GST
* **Fast food:** can also become more expensive

**Other Key Changes Under Consideration:**

* **Health Insurance:** The government is considering exempting health insurance and insurance from GST.
* **Hotel Rooms:** Hotel rooms with tariffs below ₹7,500 per night could see a GST reduction from 12% to 5%.

The GST Council’s decisions are expected to have a far-reaching impact on the Indian economy, influencing consumer spending and business operations. The final list of items affected and the exact revised GST rates will be released after the council’s deliberations conclude.

Read More