The Centre has circulated a blueprint for next-generation GST reforms. It proposes a simplified two-rate structure of 5% and 18%, while introducing a steep 40% slab for sin and luxury goods. The plan aims to simplify compliance, reduce consumer burden, and protect revenues.

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• Current four slabs to merge into 5% and 18%
• 28% slab removed, replaced with 40% for sin goods
• Household goods, packaged food, stationery to fall to 5%
• Medicines, medical equipment, insurance may drop to 5% or nil
• Relief for farmers: inverted duty in textiles, fertilisers corrected
• TVs, ACs, cement, two-wheelers, small cars to shift from 28%+ to 18%
• Hybrid passenger vehicles also reduced to 18%
• 18% slab will remain main revenue source, covering ~65% collections
• Sin goods like tobacco, luxury cars, online gaming taxed at 40%
• Experts call it structural reset, boosting consumption and MSMEs
• Hospitality sector seeks clarity, wants lower GST on food, rents
• Group of Ministers to review on Aug 20–21, GST Council to decide