On September 3, 2025, the GST Council approved sweeping reforms to simplify India’s indirect tax structure. Most GST rates were reduced, especially on essential goods, health, education, and farming items. However, some sectors raised concerns over revenue loss and rate hikes on specific items. These changes aim to ease consumer burden and stimulate economic growth.

BulletsIn

• GST Council cut rates on 413 out of 453 items; 91% items now cheaper
• GST slabs simplified: now 0%, 5%, 18%, and 40% (down from 6 slabs earlier)
• Healthcare, education, agriculture items moved from 12% to 5% slab
• Cement, building materials GST cut from 28% to 18%, boosting real estate
• Auto GST dropped to 18% on cars, bikes; luxury cars capped at 40%
• Insurance, renewable energy, and consumer goods sectors welcomed changes
• Textile sector mixed: some cuts, but 18% GST on costly garments criticized
• Airlines, MSMEs flagged concerns over higher GST on services and inputs
• Compensation cess removed on most goods; to end fully by 2025-end
• Revenue impact unclear; Centre says ₹48,000 cr, SBI estimates ₹3,700 cr