The 56th GST Council meeting in New Delhi, chaired by Finance Minister Nirmala Sitharaman, focused on amending GST slabs, easing compliance, and executing next-generation GST reforms. FMCG, auto, and cement sectors are expected to benefit under the proposed tax cuts, ensuring relief for consumers.
The first day of the meeting on 3rd September revolved around rationalising GST tax slabs. A key proposal included removing the 12% and 28% slabs by shifting goods to 5% or 18%, while introducing a higher 40% slab for sin goods.
On the second day, 4th September, discussions moved towards compliance reforms such as pre-filled returns and automated GST refunds. These measures form part of the next-generation GST reforms, scheduled for implementation in early October 2025, as announced by Prime Minister Narendra Modi on Independence Day 2025.
The meeting concluded on 4th September, with the Council set to issue detailed notifications and timelines for the proposed reforms in the coming weeks.
56th GST Council Meeting Updates
Read Official Press Release
- “Tax slabs under discussion”
- “A two-slab structure is proposed, with 5 per cent for essentials and 18 per cent for non-essentials.
- This is likely to replace the current four slabs of 5 per cent, 12 per cent, 18 per cent, and 28 per cent.
- A 40 per cent “special” rate is likely to be introduced for “sin goods” and cars costing ₹50 lakh and above.”
- “Based on the proposals approved by the Group of Ministers (GoM) last month, nearly all items in the 28 per cent tax slab, except sin goods, will shift to the 18 per cent slab, while those in the 12 per cent slab will move to the 5 per cent slab. Additionally, a 40 per cent slab will be applied to 6 to 7 items, mainly sin and demerit goods, ANI reported citing people aware of the development.”
- “The Automotive Tyre Manufacturers Association (ATMA) on Monday urged the government to reduce the GST on automotive tyres from 28 per cent to 5 per cent, emphasising that tyres should not be regarded as luxury items given their significant cost impact on vital sectors such as transportation, agriculture, mining, and construction.”
- “Professional, technical, and business services linked to petroleum crude, natural gas, and mining operations may soon face a higher GST levy. Sources told CNBC-TV18 that the Centre has proposed increasing the rate on such services from 12% with input tax credit (ITC) to 18% with ITC.”
- ANI reported that everyday necessity goods such as ghee, nuts, 20-litre drinking water, non-aerated beverages, namkeen, certain footwear, apparel, medicines, and medical devices are likely to move from 12% to 5%
- Prices of electronic items like certain TVs, washing machines, and refrigerators are expected to fall as the GST rate is likely to be cut from 28% to 18%, PTI reported
- The government’s proposal to raise GST on garments priced above ₹2,500 by moving them into the 18% slab will affect middle-class consumers and organised manufacturers, the Clothing Manufacturers Association of India (CMAI) said. Despite repeated assurances, reports suggest that the rate on such garments may rise from the current 12% to 18%.“This will spell a death knell to the industry already reeling under the crisis of the American tariff wars,”
- At present, automobiles attract the highest GST rate of 28% along with a compensation cess. However, revisions are expected soon. According to Livemint, entry-level cars may be moved to an 18% slab, while SUVs and luxury vehicles could face a special rate of 40%.
- ANI reported that the Council is likely to decide on streamlining the indirect tax system by merging the four GST slabs into two, with the aim of easing compliance and boosting efficiency.
- The 56th GST Council meeting will be led by Finance Minister Nirmala Sitharaman in New Delhi on 3rd and 4th September 2025.
- The 56th meeting of the GST Council was chaired by Finance Minister Nirmala Sitharaman, with 33 members, including state Finance Ministers and senior central government officials.
