GST 2.0 Reforms: GoM Panel Backs Simplified Indirect Tax Regime With 5 Per Cent and 18 Per Cent Slabs, Says Report

The Group of ministers (GoM) appointed for the upcoming Goods and Services Tax (GST) reforms has endorsed a major rate restructuring, backing a shift to just two slabs and recommending the removal of the 12 per cent and 28 per cent tax categories, NDTV Profit reported.

Led by Bihar Deputy Chief Minister Samrat Choudhary, the six-member GoM agreed to streamline the present four-tier GST system into a simpler two-tier model — 5 per cent for merit goods and services and 18 per cent for standard items.

The new framework will continue to impose a higher 40 per cent GST levy, but only on a limited set of sin goods.

The GoM has advanced the push for sweeping rate rationalisation and is preparing to submit its final recommendations to the GST Council.

In his Independence Day 2025 address, Prime Minister Narendra Modi unveiled the upcoming GST 2.0 reforms, set for launch by Diwali, aimed at rationalising the country’s indirect tax system.

Under the Centre’s plan, the 12 per cent and 28 per cent slabs will be eliminated altogether, leaving behind only the 5 per cent and 18 per cent rates to simplify compliance and boost efficiency.

Also Read: Simpler GST Ahead: 5 Per Cent And 18 Per Cent For Most Items, Only Select Sin And Luxury Goods In Special 40 Per Cent Category