NextFin news, On Wednesday, September 3, 2025, the GST Council held a meeting in New Delhi where it approved significant reforms to the Goods and Services Tax (GST) structure in India. The reforms include reducing the number of GST slabs to just two rates: 5% and 18%, replacing the previous multiple slab system.
The decision was announced by Finance Minister Nirmala Sitharaman, who stated that the reforms were initiated following a proposal by Prime Minister Narendra Modi. The changes are designed to simplify the tax system, reduce litigation, and improve ease of doing business across the country.
Industry bodies and business leaders welcomed the reforms, highlighting that the clarity and predictability in GST rates will provide much-needed relief to both businesses and consumers. The reduction in tax rates on common goods such as food items, televisions, and insurance policies is expected to lower costs for families and improve market efficiency.
The GST Council's overhaul also aims to ease compliance burdens for businesses by streamlining tax slabs and reducing complexities in filing returns. This move is anticipated to reduce disputes and litigation related to GST, fostering a more business-friendly environment.
According to reports from CNBC TV18 and The Tribune India, the reforms were widely supported by industry representatives who emphasized that the changes would boost economic activity and consumer spending. The Council's decision was made after extensive consultations and analysis of the current GST framework.
The GST reforms come at a time when the Indian economy is focusing on growth and stability, with the government seeking to enhance tax compliance and widen the tax base. The two-tier GST structure is expected to be implemented in the coming weeks, with detailed guidelines to be issued by the Central Board of Indirect Taxes and Customs (CBIC).
These reforms mark a significant step in India's ongoing efforts to refine its indirect tax system, aiming to balance revenue needs with the interests of businesses and consumers nationwide.
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