The GST Council meeting began on September 3 for two days, held earlier than its scheduled date. Major decisions regarding GST reforms are expected to be taken during this session.
Current GST Structure
At present, the GST system in India has four slabs. The Council is considering simplifying this structure by reducing the number of slabs.
- Almost 99% of goods in the 12% slab may be shifted to the 5% slab.
This proposal aligns with Prime Minister Narendra Modi’s statement at Red Fort, and the final decision may be announced soon.
Possible Impact on Prices
If the Council removes the 12% and 28% slabs and merges them into 5% and 18% slabs, the prices of many goods will reduce.
Goods Moving from 12% → 5% Slab
Category Examples Processed Food Products Packaged sweets, namkeen, tomato sauce, papad Ready-made Apparel & Footwear Shirts, pants, shoes, sandals Household Items Washing powder, brush, fan Furniture & Electrical Items Plastic products, furniture, electrical appliances
Goods Moving from 28% → 18% Slab
Category Examples Home Electronics TV, refrigerator, air-conditioner, washing machine Automobiles Two-wheelers, mid-segment cars Personal Care & Luxury Items Cosmetics, perfumes Construction Materials Paints, cement, building materials
Items Likely to Become Costlier
According to reports, some products may become more expensive after slab restructuring, as the government may increase tax on them. These include:
- Alcoholic beverages
- Luxury goods
- Harmful or non-essential items
This move aims to discourage consumption of such products.
Benefits for Consumers and Industry
- Consumers: Lower GST on essentials means reduced prices.
- Industry: Lower taxes may boost sales.
- Domestic Manufacturing: Encouragement for local industries, leading to growth in consumption, production, and employment.
- Global Perspective: Similar to steps taken by the U.S. to protect its industries during trade tensions.
Implementation Timeline
The revised GST rates are expected to be effective from midnight of September 5.
Expert Advice
Suggestion Reason Delay purchases of essential goods Prices of household items, medicines, motorbikes, mobiles may drop after September 5 Wait for official notification To confirm new slab rates before making big purchases
👉 In short, the GST Council’s decision could make everyday essentials cheaper while luxury items costlier, benefiting both consumers and domestic industries.