NextFin news, Chennai – On Sunday, September 14, 2025, Union Finance Minister Nirmala Sitharaman announced significant reforms to the Goods and Services Tax (GST) system in India, describing the changes as a "huge victory for each and every citizen of the country."
Speaking at the Joint Conclave of Trade and Industries Association titled 'Tax Reforms for Rising Bharat' held in Chennai, Sitharaman detailed the simplification of the GST structure from four tax slabs to just two: 5 percent and 18 percent. This restructuring moves many items previously taxed at 12 percent and 18 percent into the lower 5 percent bracket, while certain essential goods have been exempted from tax entirely.
The Finance Minister emphasized that these reforms will reduce the tax burden on all 1.4 billion Indians, aiming to spur consumption and boost economic activity ahead of the festive season. She stated, "This is not just a tax cut - it is a victory for every citizen."
The revised GST rates are scheduled to come into effect on Monday, September 22, 2025, just before the major Indian festival of Diwali. The timing was chosen to align with regional festivals such as Navratri and Durga Puja, which also drive consumer demand.
In addition to the two main slabs, a special 40 percent tax bracket has been introduced for goods considered harmful or excessively luxurious, including cigarettes, tobacco, pan masala, soft drinks, and high-end luxury cars.
The GST Council, comprising representatives from all states and Union Territories, unanimously approved the reform package. Government officials highlighted that the simplification is the biggest overhaul since GST was introduced in 2017.
Prime Minister Narendra Modi had earlier hinted at these reforms during his Independence Day address, underscoring the government's intent to ease the common man's tax burden.
These reforms are expected to immediately lower prices of essential goods, benefiting consumers nationwide and supporting economic growth.
Source: Free Press Journal, The Economic Times (September 14, 2025)
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