US Edition
GST reforms: Now there will be three slabs — 5%, 18% and special slab, say ministers after Council meet
GST Council simplifies tax slabs to 5%, 18%, and a 40% rate for select luxury and sin goods to boost domestic spending amid US tariffs, affecting majority of consumer items.
- On September 22, the GST Council approved a new three-slab structure of 5%, 18%, and 40%, with unanimous backing at the 56th meeting chaired by Union Finance Minister Nirmala Sitharaman.
- Aiming to boost household consumption, the reforms seek to ease living standards for the common man and cushion the impact of US tariffs, the government said.
- After the council meeting, officials highlighted many daily-use household items move to 5% or nil, small cars and motorcycles shift to 18%, and all individual life and health insurance policies are exempt from GST.
- Economists noted the overhaul could cut retail inflation by up to 1.1 percentage points while costing the exchequer Rs 48,000 crore, and FMCG and auto stocks rallied on the news.
- With EV incentives preserved, electric vehicles continue at 5% GST, tobacco products remain on the current regime until cess-linked loans are repaid, and standardising auto parts at 18% simplifies compliance for manufacturers.
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28 Articles
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