The Government has announced a major changeover from the existing four-tier (5%, 12%, 18%, and 28%) Goods and Services Tax structure to a simplified two-rate system of 5% and 18% and also introduced a special 40% slab for select items at the 56th GST Council meeting held in New Delhi on Wednesday (September 3, 2025).
Speaking at the press conference after a long-duration meeting of the GST council, Union Finance Minister Nirmala Sitharaman stated that rationalisation of the indirect tax regime was unanimously backed by all states and the decision was taken keeping in mind compliance, lowering costs and benefits that would go down to consumers.
The new GST rates will take effect from September 22 on the auspicious occasion of Navaratri.
On the overhaul of the GST regime, Prime Minister Narendra Modi spoke in the affirmative, hailing the new structure which according to the PM would benefit citizens, farmers, MSMEs, small traders and the middle class and thereby boosting the economy in the long run.
