GST Reforms

Latest GST Reforms at a Glance

Below is a concise summary of key GST reforms recently announced, aimed at simplifying the tax structure and stimulating domestic demand.

• Simplified Slabs: Move to two primary slabs of 5% and 18% for most goods and services.
• Special Rate for Luxury/Sin Goods: Introduction of a 40% rate for items such as cigarettes, high-end cars, and select beverages.
• Rate Reductions on Essentials: Everyday items like toothpaste and shampoo reduced from 18% to 5%.
• Consumer Durables Relief: Small cars, air conditioners, and televisions moved from 28% to 18%.
• Insurance Exemption: Individual life and health insurance policies exempt from GST.
• Effective Date: Changes effective from 22 September 2025 (as per public announcements).

What this means for businesses and consumers

• Simpler classification and compliance due to fewer slabs.
• Potential cost savings on essentials and common durables.
• Higher levy confined to luxury and sin goods.

Sources

For additional details, refer to the following public announcements and reports:

• Reuters coverage of GST rate changes
• Financial Times summary of GST slab simplification