News Brief
Not Diwali, But Navratri: GST Rate Cuts Likely By Late September As Government Fast-Tracks Move
GST reforms likely before Diwali: Everyday items may become cheaper as the government plans to roll out a simplified two-slab tax structure by late September. (File Photo)
The government has fast-tracked its plan to overhaul the Goods and Services Tax (GST), with reports suggesting that the much-anticipated reforms may roll out by late September, ahead of Diwali.
Instead of sticking to the earlier timeline, the GST Council will meet on 3–4 September to finalise details, paving the way for the new structure to take effect by 22 September, just in time for the Navratri season, reported The New Indian Express.
Officials describe the reform, dubbed “GST 2.0,” as the biggest change since the tax was introduced in 2017.
The plan simplifies the current four slabs—5 per cent, 12 per cent, 18 per cent and 28 per cent—into two: 5 per cent for essentials and 18 per cent for most goods and services, while retaining a 40 per cent rate for luxury and sin goods.
Almost all products in the 12 per cent category could shift to 5 per cent, while many in the 28 per cent slab may drop to 18 per cent. This restructuring is expected to make everyday items cheaper and boost festive shopping.
Economists estimate the reforms could add 0.6 percentage points to GDP growth next year, though the government may lose nearly $20 billion in annual revenues. The Centre hopes higher spending and improved compliance will offset the shortfall.
Most states have welcomed the move, though some seek compensation for potential revenue losses. The government is also considering exempting health and life insurance premiums from GST to ease policyholder costs.
