Centre Proposes Reducing GST Slabs From 4 To 2, May Retain 5%, 18%: Sources

Last Updated:August 15, 2025, 17:44 IST

The Centre proposed a two-slab GST rate with special rates for select items.

PM Modi said the reforms will rationalise tax slabs and reduce GST rates on essential and daily-use items.

The Centre proposed to “essentially move towards simple tax" with 2 slabs- “standard and merit", with special rates applicable for only for select few items, the finance ministry said on Friday. As per sources, the finance ministry has proposed a two-slab GST rate structure to the Group of Ministers (GoM), along with special rates for select items.

Prime Minister Narendra Modi, in his 12th consecutive Independence Day address from the Red Fort, announced that the government will roll out “next-generation GST reforms" by Diwali, aimed at easing the tax burden on households and small businesses.

He said the reforms will rationalise tax slabs and reduce GST rates on essential and daily-use items, calling the move a “massive gift" to citizens. PM Modi said, “We are committed to making life easier for the common man. This Diwali, we will bring GST reforms that will lower prices and boost compliance."

Pallavi Ghosh

Pallavi Ghosh has covered politics and Parliament for 15 years, and has reported extensively on Congress, UPA-I and UPA-II, and has now included the Finance Ministry and Niti Aayog in her reportage. She has als...Read More

Pallavi Ghosh has covered politics and Parliament for 15 years, and has reported extensively on Congress, UPA-I and UPA-II, and has now included the Finance Ministry and Niti Aayog in her reportage. She has als...

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August 15, 2025, 17:44 IST

News india Centre Proposes Reducing GST Slabs From 4 To 2, May Retain 5%, 18%: Sources

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