GST Council Likely to Approve 5% and 18% Two-Slab Structure: Big Reforms Coming by Diwali



Quick Summary
India's GST Council is set to discuss major reforms in September or October, potentially introducing a simplified two-rate structure of 5% and 18% by Diwali. This overhaul aims to reduce the tax burden on everyday items, boost consumption, and simplify the indirect tax regime. Alongside rate changes, reforms include faster GST registrations and automated refunds, making the system more business-friendly and growth-oriented.

GST Council May Finalise Two-Slab Structure in September-October Meeting - Major Reforms on Cards The GST Council is expected to meet in September or October to deliberate on sweeping reforms aimed at simplifying India's indirect tax regime. The Centre has proposed a new two-rate structure of 5% and 18%, along with a 40% levy on sin goods such as tobacco and pan masala, replacing the existing multiple slabs. Key Rate Rationalisation Plan Under the blueprint, almost 99% of goods currently taxe
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FAQ :

The reforms are expected to be implemented by Diwali, provided a consensus is reached by the GST Council.

The Centre has proposed a new two-rate structure of 5% and 18%, with a 40% levy on sin goods.

Almost 99% of goods currently taxed at 12% would move to the 5% slab, and nearly 90% of items in the 28% slab would shift to the 18% category.

Yes, exemptions and NIL GST rates on essential items will remain unchanged.

The proposals include faster GST registration (within 3 days for 95% of cases), automated refunds for exporters, pre-filled tax returns, and simplified goods classification.

The reforms aim to reduce the tax burden on common-use items, enhance consumption, create a more predictable tax framework, and make the system simpler, business-friendly, and growth-oriented.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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