GST Shake-Up: Government Plans Two-Slab GST, To Scrap 12%, 18% Slabs

The government has proposed a two-slab goods and services tax structure, according to people familiar with the matter.

Under the proposal, the existing 12% and 28% slabs will be removed, the people said, adding that about 99% of items currently taxed at 12% will move to the 5% category.

Sources told NDTV Profit that most goods taxed at 28%, including white goods, will move to the 18% category.

“The Centre is looking at all ongoing issues holistically and will propose a comprehensive package in the next GST Council meeting,” an official source said, adding that the proposal is not linked to US tariffs or geopolitical developments.

The development came hours after Prime Minister Narendra Modi, in his 79th Independence Day speech, announced a major revamp of the GST regime. He called GST one of the most significant reforms since its introduction in 2017 and stressed the need for next-generation changes to provide relief to the common man, farmers, the middle class, and MSMEs.