GST Council begins key meeting to discuss Centre’s rate cut proposals

The Goods and Services Tax (GST) Council started its two-day meeting on Wednesday (September 3, 2025), with proposals on the agenda to rationalise GST rate slabs, cut back tax incidence, and simplify GST procedures.

The proposals earlier than the Council — first mooted by the Union authorities on Independence Day — embrace decreasing the variety of GST charges by removing the 12% and 28% slabs in addition to the Compensation Cess, whereas retaining the 5% and 18% slabs, and in addition introducing a brand new 40% rate.

Also learn | Who are the members of the GST Council and what’s their voting energy?

The GST Council will even deliberate upon the Centre’s proposals to simplify and velocity up the GST registration, submitting, and returns processes.

Common man to profit

The Centre says the rate rationalisation will profit “the common man, women, students, middle class, and farmers”, claiming that each common-man gadgets and aspirational items will see decrease tax charges if its proposals are accepted by the GST Council.

According to sources, the proposal will see 99% of the gadgets within the 12% slab transferring to 5%, and 90% of the gadgets within the 28% slab transferring to 18%. The remainder of the gadgets within the 28% slab — primarily sin and luxurious items — will transfer to the 40% slab.

Though the Centre has not said the doubtless income affect of those rate cuts, economists have projected annual income losses ranging between ₹60,000 crore to ₹1.8 lakh crore.

States’ issues

The Finance Ministers of Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal — all non-BJP dominated States — met in New Delhi on Friday. They drafted a notice laying out their issues over the income shortfall due to these rate cuts and their proposals for a way the Centre may shield States’ revenues. Those proposals, too, will likely be mentioned by the GST Council throughout its ongoing meeting.

The Telugu Desam Party — which holds energy in Andhra Pradesh and is a member of the ruling National Democratic Alliance on the Centre — has thrown its assist behind the Union authorities’s proposals.

“As an alliance partner, we are supporting the Centre’s proposal of GST rate rationalisation,” Andhra Pradesh Finance Minister Payyavula Keshav instructed reporters forward of the Council meeting. “It is in favour of the common man.”