GST Council Likely to Roll Out New Slabs Around September 22, 2025

India is preparing for a major change in its indirect tax regime. According to reports from NDTV Profit and CNBC-TV18, the Centre is considering the early rollout of revised GST slabs, with implementation likely to coincide with Navratri. The new system, popularly called ‘GST 2.0’, is designed to reduce the burden on consumers, rationalise rates, and give the economy a festive push.

Proposed GST Structure

Currently, GST operates on four slabs of 5%, 12%, 18% and 28%. Under the Centre’s proposal, these will be merged into a simpler two-rate system of 5% and 18%. Goods and services will fall under either the ‘merit’ category taxed at 5% or the ‘standard’ category, taxed at 18%.

In addition, a special 40% rate will apply to luxury and sin goods such as ultra-premium cars. Certain labour-intensive sectors, including textiles and footwear, are likely to continue benefiting from concessional rates as low as 0.1%, 0.3% or 0.5%. This is to support industries that employ large numbers of workers.

Government’s Vision

On Independence Day 2025, Prime Minister Narendra Modi described the reforms as one of the most significant changes since GST’s launch in 2017. He highlighted the need to ease the tax structure for the common man, farmers, the middle class and small businesses. Finance Minister Nirmala Sitharaman echoed this view, saying the new regime would make people more self-sufficient while giving a boost to manufacturing and MSMEs.

Insurance Sector Relief

A key feature of the proposal is the exemption of health and life insurance premiums for individuals from GST. At present, these premiums attract 18% GST. Bihar Deputy CM Samrat Choudhary, who heads the GoM on insurance, said the Centre has made a clear case for this exemption. However, some states have expressed concerns. The final report of the GoM will be presented to the Council by the end of October.

Timeline and Implementation

The GST Council will meet in New Delhi on September 3–4 to discuss the plan. Notifications on the new rates are expected within five to seven days of approval. If cleared, the new slabs could come into effect by September 22, just ahead of the festive season.

Conclusion

The proposed reforms mark a big step towards simplifying GST and making it more consumer friendly. With only two slabs for most goods and services, the government hopes to reduce disputes, bring clarity, and support growth across sectors. The final decision of the GST Council in September will determine how quickly ‘GST 2.0’ becomes a reality.

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