With the revised GST rates on 375 items set to come into effect from September 22, the Central Board of Indirect Taxes and Customs (CBIC) has emphasized the importance of proactive outreach to ensure a smooth transition for businesses and consumers.
CBIC Chairman Sanjay Kumar Agarwal, in his weekly newsletter to tax officers, highlighted that greater awareness and handholding by the department will be critical in helping trade, particularly small traders and MSMEs, adapt seamlessly to the upcoming changes.
The GST Council, in its 56th meeting, approved a major tax reform replacing the existing four-slab structure of 5%, 12%, 18% and 28% with a simplified two-tier GST system of 5% and 18%, while maintaining a special 40% rate on ultra-luxury items and tobacco products. Tobacco, however, will continue to attract 28% GST plus compensation cess until December 31, 2025.
Agarwal said that lower taxes on common essentials will ease household budgets, while affordable inputs for farmers, artisans, and manufacturers will stimulate production, create jobs, and enhance exports. "These reforms are not just about rate cuts - they represent a paradigm shift towards a fairer and more citizen-centric tax framework," he noted.
To ensure businesses benefit fully, the CBIC chief stressed that effective interaction and guidance by field officers will be essential. "Proactive outreach and awareness campaigns will minimize confusion, enable seamless compliance, and allow taxpayers to take advantage of the simplifications," Agarwal wrote.
Alongside rate changes, the GST Council approved several process reforms, including:
- Simplified GST Registration Scheme from November 1, 2025, for low-risk businesses. Registration will be automated within three working days for eligible applicants.
- Optional compliance flexibility for businesses with output tax liability not exceeding ₹2.5 lakh per month.
- Faster clearance of refunds, including those related to inverted duty structures and zero-rated exports.
The reforms are being hailed as a major step toward improving ease of doing business and reducing litigation, especially for small enterprises. However, Agarwal reiterated that success depends on how effectively the government communicates these changes to the trade and industry.
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