GST Council meeting has started. This meeting will last for two days. This meeting is being held under the chairmanship of Finance Minister Nirmala Sitharaman. This is the 56th meeting of the GST Council. This time the focus is more on this meeting because changes in GST will be approved in it. The changes in GST were announced by Prime Minister Narendra Modi from the Red Fort on August 15.
PM Modi had announced on August 15 that the government is soon going to make major changes in GST. He said, ‘I am going to do your double Diwali work in Diwali. You are going to get a big gift this Diwali. In the last 8 years we have made huge reforms in GST. Reduced the tax burden in the entire country. After 8 years, time demands that we review it once. We constituted a high power committee and reviewed it and also consulted the states. We are bringing the next generation GST reform.
He had said that a big gift is going to be received on Diwali. Everyday things will become very cheap. The economy will also benefit greatly from this.
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What did the Finance Minister tell before the meeting?
GST Council meeting is being held in New Delhi. The chairperson of the GST Council is Finance Minister Nirmala Sitharaman. This council includes Minister of State for Finance Pankaj Chaudhary and Finance Ministers of all the states.
Before this meeting, Finance Minister Nirmala Sitharaman had said in Chennai that the next generation GST will further simplify the procedures and reduce the tax burden.
VIDEO | Delhi: 56th GST Council Meeting underway.
The Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising ministers from all states, will discuss the Centre’s ‘next-gen’ GST reform proposal of having just two tax rates of 5 and 18 per cent by moving… pic.twitter.com/SQSUUsq8rD
— Press Trust of India (@PTI_News) September 3, 2025
He had said, ‘There is a plan to implement the next generation GST reforms in the two-day meeting.’ He had further said that there will be further reduction in tax burden in the coming months, which will make it easier for small businessmen to work.
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What are the expectations from the meeting?
Prime Minister Modi had said that a ‘big gift’ will be received on Diwali. Changes in GST will be approved in the GST Council. It is being told that the government will reduce the existing 4 slabs of GST to 2.
Currently there are 4 slabs in GST – 5%, 12%, 18% and 40%. At present there is no tax on essential food items. Everyday items come under 5% tax. Whereas, 12% tax is imposed on standard items. Electronics and services attract 18% GST. Whereas, luxury items attract 28% tax. Apart from these, 40% GST is imposed on some things.
According to news agency PTI, the government will reduce the 4 slabs of GST to only 2. After this the 12% and 28% slabs will end. It is being told that 90% of the items like butter, fruit juice and dry fruits falling under the 12% slab will be put in the 5% slab. Similarly, 90% of the items like AC, TV, fridge and washing machine along with cement, which currently attract 28% GST, can be brought under the ambit of 18%.
PTI quoted government sources as saying that after the change, pan-masala, tobacco, gutkha and online gaming can be brought under the ambit of 40% GST.
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What can be cheaper?
PTI quoted sources as saying that the Group of Ministers i.e. GoM has supported keeping electric vehicles priced up to Rs 40 lakh under the ambit of 18% GST. However, the Central Government wants to bring it within the range of 5% and the same stance will be adopted in the GST Council meeting.
Most of the commonly used items like ghee, dry fruits, drinking water (20 litres), non-gas beverages, snacks, footwear, medicines and medical equipment can fall in the tax slab of 12% to 5%. Items like pencils, bicycles, umbrellas and hair pins can also be put in the 5% slab.
Prices of some electronic goods like TV, washing machine and refrigerator are likely to fall as GST on these is said to be reduced from 28% to 18%.
Goods like automobiles currently attract 28% GST. Along with this, compensation cess is also levied. It is being told that 18% GTC can be imposed on some cars. Whereas, 40% GST can be imposed on SUVs and luxury cars. Apart from this, things like tobacco, pan masala and cigarettes can also be brought under 40% tax.
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States’ demand- Center should give compensation
If the slab in GST is reduced then it may cause huge loss to the states. This is because states get a larger share in GST. The states are demanding that the central government should compensate them for this loss. States like West Bengal say that the revenue from 40% slab items should be shared with the states.
Before the GST Council meeting, the Finance Ministers of 8 states ruled by opposition parties – Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal had held a meeting.
These states argue that changing the tax rate and eliminating the slabs will reduce the revenue. However, the Center believes that as things become cheaper, consumption will increase and the loss will be compensated in the times to come.
Jharkhand Finance Minister Radha Krishna Kishore said that if the new GST is implemented, his state will suffer a loss of Rs 2,000 crore. He said that if the central government agrees to compensate us for the loss then we have no problem in approving this change. He said that in the federal structure, it is the responsibility of the Center to compensate the states for the loss in revenue.
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