Government proposes 5%, 18% GST slabs

17-Aug-2025

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The government has proposed a major overhaul of the Goods and Services Tax (GST) structure, recommending two tax slabs of 5% and 18%, with sin goods like tobacco and pan masala facing a 40% GST. 

Government sources said the proposal has been sent to the GST Council, which will hold a two-day meeting in September to finalise the changes.

Prime Minister Narendra Modi, in his Independence Day address, announced plans for a “next-generation GST reform” to be introduced by Diwali. “I am going to give a great gift this Diwali. Over the past eight years, we implemented a major GST reform and simplified taxes. Now, the time has come for a review. We have conducted it, consulted with states, and are set to introduce a ‘next-generation GST reform’,” the Prime Minister said from the Red Fort.

The September GST Council meeting will decide on the final structure, with implementation targeted before Diwali.