The Goods and Services Tax (GST) Council on Wednesday eliminated the 12 per cent and 28 per cent slabs, moving from a four-slab to a two-slab taxation structure. Most of the goods and services in these two slabs will be moved to the 5 per cent and 18 per cent GST slabs. Announcing the mega move, Finance Minister Nirmala Sitharaman described the decision as a "structural reform". The government has also passed on the benefits of the GST reforms to the agricultural sector, the country's economic backbone.&nbsp;The Centre has moved several daily-use products like soap, toothpaste, namkeen, chocolates, and coffee to the 5 per cent slab from 12 per cent or 18 per cent slabs. In a mega move, tractors and compositing machines will now attract a GST of 5 per cent from the previous 12 per cent tax.&nbsp;<a href="https://www.wionews.com/business-economy/did-tariff-turmoil-prompt-centre-s-mega-gst-reform-nirmala-sitharaman-s-clarification-1756929197130">Also read: Did 'tariff turmoil' prompt Centre's mega GST reform? Nirmala Sitharaman's clarification</a>&nbsp;<h2>How Centre's new rates affect the farm sector</h2>Diesel&nbsp;engines up to 15 horsepower, hand pumps, drip irrigation systems and sprayers, harvesting and threshing machines, poultry-keeping or bee-keeping machines, composting machines, tractors, etc, have been moved from the 12 per cent slab to the 5 per cent slab.&nbsp;Tractor tyres, tubes, agricultural diesel engines (above 250cc), hydraulic pumps for tractors, key tractor parts, wheel rims, centre housing, etc, will now attract a GST of 5 per cent from 18 per cent.&nbsp;GST on fertilisers like sulphuric acid, nitric acid and ammonia will be lowered from 18 per cent to 5 per cent.&nbsp;Gibberellic acid, bio-pesticides will attract a GST of 5 per cent from 12 per cent.<h2>GST rates on cars reduced</h2>The Centre has also reduced GST on cars.&nbsp;Industry body SIAM hailed the decision to reduce GST on vehicles to 18 per cent and 40 per cent, from earlier rates of 28 to 31 per cent and 43 to 50 per cent.&nbsp;Anish Shah, Group CEO &amp; MD, Mahindra Group, welcomed the decision and said, "The next-generation GST reforms announced today mark a defining moment in India's journey towards building a simpler, fairer, and more inclusive tax system. By moving to a streamlined two-rate structure and focusing on essentials that touch the lives of every citizen, the Government has reaffirmed its commitment to Ease of Living and Ease of Doing Business. These measures will not only provide immediate relief to households but also strengthen key sectors such as automobiles, agriculture, healthcare, renewable energy, and MSMEs."

The Goods and Services Tax (GST) Council on Wednesday eliminated the 12 per cent and 28 per cent slabs, moving from a four-slab to a two-slab taxation structure. 

The Goods and Services Tax (GST) Council on Wednesday eliminated the 12 per cent and 28 per cent slabs, moving from a four-slab to a two-slab taxation structure. Most of the goods and services in these two slabs will be moved to the 5 per cent and 18 per cent GST slabs. Announcing the mega move, Finance Minister Nirmala Sitharaman described the decision as a "structural reform". The government has also passed on the benefits of the GST reforms to the agricultural sector, the country's economic backbone. The Centre has moved several daily-use products like soap, toothpaste, namkeen, chocolates, and coffee to the 5 per cent slab from 12 per cent or 18 per cent slabs. In a mega move, tractors and compositing machines will now attract a GST of 5 per cent from the previous 12 per cent tax. Also read: Did 'tariff turmoil' prompt Centre's mega GST reform? Nirmala Sitharaman's clarification How Centre's new rates affect the farm sector Diesel engines up to 15 horsepower, hand pumps, drip irrigation systems and sprayers, harvesting and threshing machines, poultry-keeping or bee-keeping machines, composting machines, tractors, etc, have been moved from the 12 per cent slab to the 5 per cent slab. Tractor tyres, tubes, agricultural diesel engines (above 250cc), hydraulic pumps for tractors, key tractor parts, wheel rims, centre housing, etc, will now attract a GST of 5 per cent from 18 per cent. GST on fertilisers like sulphuric acid, nitric acid and ammonia will be lowered from 18 per cent to 5 per cent. Gibberellic acid, bio-pesticides will attract a GST of 5 per cent from 12 per cent. GST rates on cars reduced The Centre has also reduced GST on cars. Industry body SIAM hailed the decision to reduce GST on vehicles to 18 per cent and 40 per cent, from earlier rates of 28 to 31 per cent and 43 to 50 per cent. Anish Shah, Group CEO & MD, Mahindra Group, welcomed the decision and said, "The next-generation GST reforms announced today mark a defining moment in India's journey towards building a simpler, fairer, and more inclusive tax system. By moving to a streamlined two-rate structure and focusing on essentials that touch the lives of every citizen, the Government has reaffirmed its commitment to Ease of Living and Ease of Doing Business. These measures will not only provide immediate relief to households but also strengthen key sectors such as automobiles, agriculture, healthcare, renewable energy, and MSMEs."

New GST rates in India: Tractors and compositing machines will now attract a GST of 5 per cent from the previous 12 per cent tax.

New GST Rates 2025: Tractors, fertilisers, equipment - Centre extends tax bounty for farmers

Ahead of the crucial GST Council meeting, the finance ministers of eight opposition-ruled states met on Wednesday morning and formed a strategy over the Centre's plan to rationalise GST rates. The ministers of Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal participated&nbsp;in the huddle and later expressed concerns over the expected loss of revenue if the GST Council approves the Central government's proposal.<h2>Here's what the Opposition says on GST reforms</h2>Most states supported the Centre's proposal. However, they said that they will not approve the proposal in the GST Council meeting until the government clarifies how it plans to offset the revenue loss.&nbsp;The National Democratic Alliance’s (NDA’s) key ally, TDP, which rules in Andhra Pradesh, supported the proposal.&nbsp;Jharkhand’s Finance Minister Radha Krishana Kishore, however, said his state stands to lose Rs 2000 crore annually if the&nbsp;proposal is approved.&nbsp;"Loss hoga state ko, woh compensation central government de toh phir unko agenda ko approve karenge otherwise nahi karenge (States will face revenue loss and the central government needs to compensate for revenue loss. And if they assure compensation, we will approve the proposal, otherwise not)," he was quoted as saying by The Indian Express.&nbsp;Himachal Pradesh’s Minister for Technical Education, Rajesh Dharmani, said he would wait and watch the Centre's next move during the meeting.&nbsp;The 56th meeting of the GST Council began today. Union Finance Minister Nirmala Sitharaman and ministers from 31 states and Union Territories attended the meeting, where the main agenda was a discussion on the Centre's GST rationalisation plan.The Opposition-ruled states met on Friday, where they said the loss of revenue would be between Rs 85,000 crore and Rs 2 lakh crore per annum. They demanded that the Centre compensate the states for revenue loss.&nbsp;The Central government has proposed to eliminate the 12 per cent and 28 per cent GST slabs and place most of the items in these categories in 5 per cent and 18 per cent slabs.

Ahead of the crucial GST Council meeting, the finance ministers of eight opposition-ruled states met on Wednesday morning and formed a strategy over the Centre's plan to rationalise GST rates.

Ahead of the crucial GST Council meeting, the finance ministers of eight opposition-ruled states met on Wednesday morning and formed a strategy over the Centre's plan to rationalise GST rates. The ministers of Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal participated in the huddle and later expressed concerns over the expected loss of revenue if the GST Council approves the Central government's proposal. Here's what the Opposition says on GST reforms Most states supported the Centre's proposal. However, they said that they will not approve the proposal in the GST Council meeting until the government clarifies how it plans to offset the revenue loss. The National Democratic Alliance’s (NDA’s) key ally, TDP, which rules in Andhra Pradesh, supported the proposal. Jharkhand’s Finance Minister Radha Krishana Kishore, however, said his state stands to lose Rs 2000 crore annually if the proposal is approved. "Loss hoga state ko, woh compensation central government de toh phir unko agenda ko approve karenge otherwise nahi karenge (States will face revenue loss and the central government needs to compensate for revenue loss. And if they assure compensation, we will approve the proposal, otherwise not)," he was quoted as saying by The Indian Express. Himachal Pradesh’s Minister for Technical Education, Rajesh Dharmani, said he would wait and watch the Centre's next move during the meeting. The 56th meeting of the GST Council began today. Union Finance Minister Nirmala Sitharaman and ministers from 31 states and Union Territories attended the meeting, where the main agenda was a discussion on the Centre's GST rationalisation plan. The Opposition-ruled states met on Friday, where they said the loss of revenue would be between Rs 85,000 crore and Rs 2 lakh crore per annum. They demanded that the Centre compensate the states for revenue loss. The Central government has proposed to eliminate the 12 per cent and 28 per cent GST slabs and place most of the items in these categories in 5 per cent and 18 per cent slabs.

GST Council Meeting underway: Jharkhand’s Finance Minister Radha Krishana Kishore, however, said his state stands to lose Rs 2000 crore annually if the&nbsp;proposal is approved.

GST Council Meeting: What is Opposition's stand on Centre's proposed GST reforms?

The Goods and Services Tax Council, which decides on matters related to GST, has reportedly backed raising taxes on electric cars. The panel has reportedly proposed increasing the GST on electric cars ($23,000-$46,000) from 5 per cent to 18 per cent. If approved, the prices of these cars will likely go up.<h2>What is the Centre's proposal on GST on electric vehicles?</h2>The central government was also mulling over taxing cars priced over $46,000 at 28 per cent, as it believes&nbsp;that such vehicles are imported and are meant for the upper segment of society, reported Reuters. However, since the government has proposed to eliminate the 28 per cent tax slab, such cars will likely be placed in the 18 per cent slab.&nbsp;The GST Council met today&nbsp;to deliberate&nbsp;on the implications of the government's proposal on GST.&nbsp;The Centre intends to eliminate the 28 per cent and 12 per cent GST slabs and place items in these categories in 18 per cent and 5 per cent slabs, respectively.&nbsp;The Group of Ministers has already approved the decision. If ratified by the GST Council, the move will ease the tax burden on consumers and increase spending.India's EV market is small, accounting for only 5 per cent of the total cars sold between April and July. However, it clocked a 93 per cent growth during that period, hinting at high potential.&nbsp;A document accessed by the news agency noted that the 5 per cent tax was to incentivise faster adoption of electric vehicles. It, however, pointed out that such vehicles can be taxed at higher rates.&nbsp;If approved, this move will affect foreign automakers more than the domestic EV manufacturers.&nbsp;This might target foreign manufacturers&nbsp;like Mercedes-Benz, BMW, and BYD. Tesla, which recently launched its Model Y in India, will fall into this category.&nbsp;Carmakers, however, have called for keeping the GST rate on EVs the same.&nbsp;Mercedes-Benz told the agency that its top-end cars won't be impacted much. However, entry-level EVs would be mostly impacted.&nbsp;Tata Motors leads the Indian electric car market with a whopping 40 per cent market share. Mahindra's market share is 18 per cent, followed by BYD at 3 per cent. Mercedes and BMW's combined market share is 2 per cent.

The Goods and Services Tax Council, which decides on matters related to GST, has reportedly backed raising taxes on electric cars.

The Goods and Services Tax Council, which decides on matters related to GST, has reportedly backed raising taxes on electric cars. The panel has reportedly proposed increasing the GST on electric cars ($23,000-$46,000) from 5 per cent to 18 per cent. If approved, the prices of these cars will likely go up. What is the Centre's proposal on GST on electric vehicles? The central government was also mulling over taxing cars priced over $46,000 at 28 per cent, as it believes that such vehicles are imported and are meant for the upper segment of society, reported Reuters. However, since the government has proposed to eliminate the 28 per cent tax slab, such cars will likely be placed in the 18 per cent slab. The GST Council met today to deliberate on the implications of the government's proposal on GST. The Centre intends to eliminate the 28 per cent and 12 per cent GST slabs and place items in these categories in 18 per cent and 5 per cent slabs, respectively. The Group of Ministers has already approved the decision. If ratified by the GST Council, the move will ease the tax burden on consumers and increase spending. India's EV market is small, accounting for only 5 per cent of the total cars sold between April and July. However, it clocked a 93 per cent growth during that period, hinting at high potential. A document accessed by the news agency noted that the 5 per cent tax was to incentivise faster adoption of electric vehicles. It, however, pointed out that such vehicles can be taxed at higher rates. If approved, this move will affect foreign automakers more than the domestic EV manufacturers. This might target foreign manufacturers like Mercedes-Benz, BMW, and BYD. Tesla, which recently launched its Model Y in India, will fall into this category. Carmakers, however, have called for keeping the GST rate on EVs the same. Mercedes-Benz told the agency that its top-end cars won't be impacted much. However, entry-level EVs would be mostly impacted. Tata Motors leads the Indian electric car market with a whopping 40 per cent market share. Mahindra's market share is 18 per cent, followed by BYD at 3 per cent. Mercedes and BMW's combined market share is 2 per cent.

The Goods and Services Tax Council met today. It will likely discuss the elimination of the 12 per cent and 18 per cent GST slabs. The move, proposed by the Centre, is also ratified by the Group of Ministers.

GST Council meets today: Will electric cars become more expensive?

New Delhi: The upcoming next-generation Goods and Services Tax (GST) reforms will further simplify tax processes and reduce compliance burdens, particularly for small businesses, Union Finance Minister Nirmala Sitharaman said on Tuesday.&nbsp;The Finance Minister was speaking at the 120th Foundation Day Celebrations of City Union Bank in Chennai.&nbsp;"The Prime Minister has recently announced the creation of a task force for next-generation reforms with a clear mandate to simplify regulations, lower compliance costs, and build a more enabling ecosystem for startups, MSMEs, and entrepreneurs. Complementing this is the planned rollout of the next generation of GST reforms with a council meeting tomorrow and the day after," Sitharaman said, adding that in the coming months, there will be further reduction in compliance burden, making it easier for small businesses to thrive.&nbsp;The 56th meeting of the Goods and Services Tax (GST) Council will be held on September 3-4, according to an official memorandum.&nbsp;According to government sources, the Central Government proposes to eliminate the 12 per cent and 28 per cent GST rates, retaining only the 5 per cent and 18 per cent GST rates.&nbsp;The announcement for the GST council meeting was made days after Prime Minister Narendra Modi announced during his Independence Day Speech that people were going to get a very big gift on Diwali and the government had embarked on a "big reform of GST".&nbsp;Sitharaman said that over the past 11 years, more than 56 crore Jan Dhan accounts have been opened, with a total deposit balance of Rs 2.68 lakh crore. Of these accounts, 67 per cent were opened in rural or semi-urban areas, and women hold 56 percent, she added.&nbsp;"A bank account is not just a passbook; it is a passport to opportunity, enabling access to credit, savings, insurance, and dignity," she added, according to a post on X by Sitharaman's office.&nbsp;The minister said that India's scheduled commercial banks have recorded massive improvement in their asset quality, and as a result, NPAs have come down.&nbsp;"Macro stress test results show that the Scheduled Commercial Banks' aggregate capital levels will continue to remain above the regulatory minimum," the post added.&nbsp;Bank deposits with Scheduled Commercial Banks (SCBs) recorded a year-on-year growth of 11.3 per cent as of June-end 2025, slightly lower than the 11.7 per cent growth (net of merger) seen a year earlier, according to the latest quarterly data released by the Reserve Bank of India last Friday.&nbsp;The surge was primarily driven by a strong rise in term deposits, which grew 13.5 per cent year-on-year, significantly outpacing the modest 5.4 per cent growth in savings deposits.

The upcoming next-generation Goods and Services Tax (GST) reforms will further simplify tax processes and reduce compliance burdens, particularly for small businesses, Union Finance Minister Nirmala Sitharaman said on Tuesday.

New Delhi: The upcoming next-generation Goods and Services Tax (GST) reforms will further simplify tax processes and reduce compliance burdens, particularly for small businesses, Union Finance Minister Nirmala Sitharaman said on Tuesday. The Finance Minister was speaking at the 120th Foundation Day Celebrations of City Union Bank in Chennai. "The Prime Minister has recently announced the creation of a task force for next-generation reforms with a clear mandate to simplify regulations, lower compliance costs, and build a more enabling ecosystem for startups, MSMEs, and entrepreneurs. Complementing this is the planned rollout of the next generation of GST reforms with a council meeting tomorrow and the day after," Sitharaman said, adding that in the coming months, there will be further reduction in compliance burden, making it easier for small businesses to thrive. The 56th meeting of the Goods and Services Tax (GST) Council will be held on September 3-4, according to an official memorandum. According to government sources, the Central Government proposes to eliminate the 12 per cent and 28 per cent GST rates, retaining only the 5 per cent and 18 per cent GST rates. The announcement for the GST council meeting was made days after Prime Minister Narendra Modi announced during his Independence Day Speech that people were going to get a very big gift on Diwali and the government had embarked on a "big reform of GST". Sitharaman said that over the past 11 years, more than 56 crore Jan Dhan accounts have been opened, with a total deposit balance of Rs 2.68 lakh crore. Of these accounts, 67 per cent were opened in rural or semi-urban areas, and women hold 56 percent, she added. "A bank account is not just a passbook; it is a passport to opportunity, enabling access to credit, savings, insurance, and dignity," she added, according to a post on X by Sitharaman's office. The minister said that India's scheduled commercial banks have recorded massive improvement in their asset quality, and as a result, NPAs have come down. "Macro stress test results show that the Scheduled Commercial Banks' aggregate capital levels will continue to remain above the regulatory minimum," the post added. Bank deposits with Scheduled Commercial Banks (SCBs) recorded a year-on-year growth of 11.3 per cent as of June-end 2025, slightly lower than the 11.7 per cent growth (net of merger) seen a year earlier, according to the latest quarterly data released by the Reserve Bank of India last Friday. The surge was primarily driven by a strong rise in term deposits, which grew 13.5 per cent year-on-year, significantly outpacing the modest 5.4 per cent growth in savings deposits.

The Finance Minister was speaking at the 120th Foundation Day Celebrations of City Union Bank in Chennai.

Nirmala Sitharaman says GST reforms to simplify regulations, lower compliance costs

The central government&nbsp;is mulling over eliminating the 12 per cent and 28 per cent Goods and Services Tax (GST) to ease the tax burden on the common man, to spur consumer spending, and economic growth. The Group of Ministers has approved the centre's proposal. However, the final decision will be made by the&nbsp;Goods and Services Tax (GST) Council. When is the council&nbsp;meeting?&nbsp;According to a statement, the Goods and Services Tax (GST) Council's 56th meeting will be held on September 3-4, where the government's decision can be ratified.&nbsp;An official memorandum issued by Arvind Shrivastava, Secretary to the Government of India and ex officio Secretary to the GST Council, said that the meeting would be organized on these dates.&nbsp;"The undersigned is directed to refer to the above subject and to convey that the 56th Meeting of the GST Council will be held on 3rd and 4th September, 2025," it added.&nbsp;It further added that the venue of the planned meeting and the agenda will be communicated soon.&nbsp;Prime Minister Narendra Modi announced during his Independence Day Speech that the people of the country would get a big gift on Diwali as the government was embarking on GST reform.&nbsp;The GST Council is a constitutional body responsible for making recommendations on issues related to the implementation of the Goods and Services Tax (GST) in India.&nbsp;The government has proposed to place the majority of goods and services under the&nbsp;12 per cent and 28 per cent GST slabs into 5 per cent and 18 per cent GST slabs, which will lower taxes significantly. A 40 percent tax will be charged on "sin goods", including tobacco products.&nbsp;Earlier this week, the Group of Ministers approved the Centre's proposal.&nbsp;"Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council. The Council will make a decision," Bihar Deputy Chief Minister Samrat Choudhary said on Thursday.

The central government is mulling over eliminating the 12 per cent and 28 per cent Goods and Services Tax (GST) to ease the tax burden on the common man, to spur consumer spending, and economic growth.

The central government is mulling over eliminating the 12 per cent and 28 per cent Goods and Services Tax (GST) to ease the tax burden on the common man, to spur consumer spending, and economic growth. The Group of Ministers has approved the centre's proposal. However, the final decision will be made by the Goods and Services Tax (GST) Council. When is the council meeting? According to a statement, the Goods and Services Tax (GST) Council's 56th meeting will be held on September 3-4, where the government's decision can be ratified. An official memorandum issued by Arvind Shrivastava, Secretary to the Government of India and ex officio Secretary to the GST Council, said that the meeting would be organized on these dates. "The undersigned is directed to refer to the above subject and to convey that the 56th Meeting of the GST Council will be held on 3rd and 4th September, 2025," it added. It further added that the venue of the planned meeting and the agenda will be communicated soon. Prime Minister Narendra Modi announced during his Independence Day Speech that the people of the country would get a big gift on Diwali as the government was embarking on GST reform. The GST Council is a constitutional body responsible for making recommendations on issues related to the implementation of the Goods and Services Tax (GST) in India. The government has proposed to place the majority of goods and services under the 12 per cent and 28 per cent GST slabs into 5 per cent and 18 per cent GST slabs, which will lower taxes significantly. A 40 percent tax will be charged on "sin goods", including tobacco products. Earlier this week, the Group of Ministers approved the Centre's proposal. "Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council. The Council will make a decision," Bihar Deputy Chief Minister Samrat Choudhary said on Thursday.

Goods and Services Tax news: The central government has proposed that two slabs of the GST will be abolished, and majority of goods and services in these slabs will be placed in the lower slabs.

Goods and Services Tax reforms: When is the GST Council meeting? Dates revealed

The Group of Ministers, a key decision-making panel on Goods and Services Tax (GST), has approved the Centre's proposal to eliminate the 12 per cent and 28 per cent slabs. If approved by the GST Council, the reduction in the number of slabs will result in the lowering of GST on the majority of goods and services, boosting consumer spending by handing the masses more disposable income.&nbsp;Bihar Deputy Chief Minister Samrat Choudhary on Thursday confirmed that the panel&nbsp;approved the Centre's proposal. "We have supported the two proposals by the Government of India of scrapping GST slabs of 12 per cent and 28 per cent," Choudhary said after attending a meeting of the Group of Ministers (GoM) with Union Finance Minister Nirmala Sitharaman.&nbsp;The decision was arrived at after holding discussions&nbsp;with stakeholders. The GST Council will make the final decision.&nbsp;"Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council. The Council will make a decision," Choudhary added.&nbsp;Over 90 per cent of all goods in the 12 per cent and 28 per cent GST slabs will be moved to the 5 per cent and 18 per cent category, if the GST Council approves the recommendation. These will help the masses save GST on almost all essentials. Many goods and services, including cars and insurance, will likely become cheaper.&nbsp;West Bengal's health minister, Chandrima Bhattacharya, said he flagged the expected loss of revenue to the states.&nbsp;"All the states are with the common people, but I raised in the meeting that if the states are going to lose the revenue, then that ultimately goes back to the common people, so we want to know how we are going to be compensated. The GoM will now send its report to the GST Council with the notings of our concern we raised," the minister said.&nbsp;UP Minister Suresh Khanna said that the Centre didn't mention the loss in revenue expected to be incurred with the decision.&nbsp;Prime Minister Narendra Modi, in his Independence Day speech, announced the rationalisation of the existing GST structure.

The Group of Ministers, a key decision-making panel on Goods and Services Tax (GST), has approved the Centre's proposal to eliminate the 12 per cent and 28 per cent slabs.

The Group of Ministers, a key decision-making panel on Goods and Services Tax (GST), has approved the Centre's proposal to eliminate the 12 per cent and 28 per cent slabs. If approved by the GST Council, the reduction in the number of slabs will result in the lowering of GST on the majority of goods and services, boosting consumer spending by handing the masses more disposable income. Bihar Deputy Chief Minister Samrat Choudhary on Thursday confirmed that the panel approved the Centre's proposal. "We have supported the two proposals by the Government of India of scrapping GST slabs of 12 per cent and 28 per cent," Choudhary said after attending a meeting of the Group of Ministers (GoM) with Union Finance Minister Nirmala Sitharaman. The decision was arrived at after holding discussions with stakeholders. The GST Council will make the final decision. "Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council. The Council will make a decision," Choudhary added. Over 90 per cent of all goods in the 12 per cent and 28 per cent GST slabs will be moved to the 5 per cent and 18 per cent category, if the GST Council approves the recommendation. These will help the masses save GST on almost all essentials. Many goods and services, including cars and insurance, will likely become cheaper. West Bengal's health minister, Chandrima Bhattacharya, said he flagged the expected loss of revenue to the states. "All the states are with the common people, but I raised in the meeting that if the states are going to lose the revenue, then that ultimately goes back to the common people, so we want to know how we are going to be compensated. The GoM will now send its report to the GST Council with the notings of our concern we raised," the minister said. UP Minister Suresh Khanna said that the Centre didn't mention the loss in revenue expected to be incurred with the decision. Prime Minister Narendra Modi, in his Independence Day speech, announced the rationalisation of the existing GST structure.

The Group of Ministers has approved the Centre's proposal, aimed at boosting consumer spending by lowering Goods and Services Tax (GST)

Key panel approves elimination of 12% and 28% GST slabs

The Group of Ministers (GoMs), constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation, has proposed a complete exemption on health and life insurance for individuals. The government is mulling over doing away with the 12 per cent and 28 per cent GST slabs and replacing them with 5 per cent and 18 per cent slabs. The final decision will be taken by the council near Diwali.&nbsp;Abolishing GST on insurance premiums will likely lower the amounts paid by the insured, making insurance more affordable for Indians.&nbsp;This move, if approved, will lower the cost of the insurance and increase the disposable income. The government, however, will have to forgo substantial revenue. However, it will likely result in higher penetration.<h2>How much GST does the government levy on insurance premiums?</h2>&nbsp;The government levies 18 per cent on health and life insurance premiums. A person pays Rs 18 as tax for a premium of Rs 100, making the total amount Rs 118.&nbsp;However, businesses can reduce their tax liability by claiming a tax credit. However, if the GST is done away with, insurers would still have to incur Rs 12.6 worth of GST expenses per Rs 100 of premium. However, it will not get the Rs 18 provided by the insured. Hence, the companies can increase the premium before tax. However, the post-tax premium will still come down.&nbsp;If the insurer burdens policyholders with the tax, the premium may go up to Rs 112.6, but it will be less than the current final premium.&nbsp;<h2>How will your premium be impacted?</h2>If the companies absorb this GST burden completely, it will greatly benefit policyholders.&nbsp;"To determine if a reduction in GST rate will help policyholders, we will have to first determine whether health and life insurance services are going to be considered as Nil Rated or will they be considered as exempt from GST. The answer to this will determine the eligibility for input tax credit. In case the services are considered as exempt, then input tax credit will not be available, and therefore, the savings on account of GST rate reduction will be negated by the hike in premiums due to unavailability of credit," Hemik Shah, co-founder of Qian Insurance, told ET.&nbsp;In the absence of ITC, it seems unlikely that insurance companies will be able to pass on the benefits, he added.

The Group of Ministers (GoMs), constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation, has proposed a complete exemption on health and life insurance for individuals. 

The Group of Ministers (GoMs), constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation, has proposed a complete exemption on health and life insurance for individuals. The government is mulling over doing away with the 12 per cent and 28 per cent GST slabs and replacing them with 5 per cent and 18 per cent slabs. The final decision will be taken by the council near Diwali. Abolishing GST on insurance premiums will likely lower the amounts paid by the insured, making insurance more affordable for Indians. This move, if approved, will lower the cost of the insurance and increase the disposable income. The government, however, will have to forgo substantial revenue. However, it will likely result in higher penetration. How much GST does the government levy on insurance premiums? The government levies 18 per cent on health and life insurance premiums. A person pays Rs 18 as tax for a premium of Rs 100, making the total amount Rs 118. However, businesses can reduce their tax liability by claiming a tax credit. However, if the GST is done away with, insurers would still have to incur Rs 12.6 worth of GST expenses per Rs 100 of premium. However, it will not get the Rs 18 provided by the insured. Hence, the companies can increase the premium before tax. However, the post-tax premium will still come down. If the insurer burdens policyholders with the tax, the premium may go up to Rs 112.6, but it will be less than the current final premium. How will your premium be impacted? If the companies absorb this GST burden completely, it will greatly benefit policyholders. "To determine if a reduction in GST rate will help policyholders, we will have to first determine whether health and life insurance services are going to be considered as Nil Rated or will they be considered as exempt from GST. The answer to this will determine the eligibility for input tax credit. In case the services are considered as exempt, then input tax credit will not be available, and therefore, the savings on account of GST rate reduction will be negated by the hike in premiums due to unavailability of credit," Hemik Shah, co-founder of Qian Insurance, told ET. In the absence of ITC, it seems unlikely that insurance companies will be able to pass on the benefits, he added.

GST exemption on health, life insurance proposed: The extent of benefits passed on to the insured will largely depend on the companies. Here's how.&nbsp;

GST exemption on health insurance, life insurance likely: How will it impact premiums?

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan.&nbsp;"Everyone expressed that Life and Health Insurance (for individuals) should be exempted from GST. The GST Council will decide," said Bihar Deputy CM Samrat Choudhary, who was present at the meeting.&nbsp;Telangana Deputy CM Mallu Bhatti Vikramarka also confirmed that the GoM proposed a complete exemption on health and life insurance for individuals.&nbsp;Currently, both health and life insurance policy premiums attract 18 per cent GST.&nbsp;During the meeting, the Union Finance Minister emphasised that the proposal by the Central Government is with a vision to usher in the next generation of GST reforms in India's journey towards becoming Atmanirbhar Bharat.&nbsp;Union Minister of State for Finance, Chief Minister of Goa, Deputy CM of Bihar, and Finance Ministers of States in the three GoMs were also present at the meeting.&nbsp;The next GST Council meeting is likely to be held next month, in September.&nbsp;These reforms, proposed by the Central Government to the GoMs, are based on three key pillars.&nbsp;&nbsp;Structural reforms: The reforms will correct inverted duty structures to cut input tax credit accumulation and boost domestic value addition, resolve classification issues for simpler compliance and fewer disputes, and ensure stability &amp; predictability in GST policy to strengthen industry confidence and long-term planning.&nbsp;Rate rationalisation: The rate rationalisation exercise aims at providing greater relief to the common man, farmers, the middle class, and MSMEs, while ensuring a simplified, transparent, and growth-oriented tax regime. This would enhance affordability, boost consumption, and make essential and aspirational goods more accessible to a wider population.&nbsp;Ease of living: The upcoming GST reforms will ensure seamless, tech-driven, and time-bound registration, introduce pre-filled returns to reduce errors and mismatches, and enable faster, automated refunds, all aimed at simplifying compliance, supporting businesses, and enhancing the overall ease of living and doing business.&nbsp;"The Central Government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism," the Ministry of Finance posted on X.

Finance Minister Nirmala Sitharaman on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan.

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday addressed the Group of Ministers (GoMs) constituted by the GST Council on Compensation Cess, Health and Life Insurance (for individuals), and Rate Rationalisation at Vigyan Bhawan. "Everyone expressed that Life and Health Insurance (for individuals) should be exempted from GST. The GST Council will decide," said Bihar Deputy CM Samrat Choudhary, who was present at the meeting. Telangana Deputy CM Mallu Bhatti Vikramarka also confirmed that the GoM proposed a complete exemption on health and life insurance for individuals. Currently, both health and life insurance policy premiums attract 18 per cent GST. During the meeting, the Union Finance Minister emphasised that the proposal by the Central Government is with a vision to usher in the next generation of GST reforms in India's journey towards becoming Atmanirbhar Bharat. Union Minister of State for Finance, Chief Minister of Goa, Deputy CM of Bihar, and Finance Ministers of States in the three GoMs were also present at the meeting. The next GST Council meeting is likely to be held next month, in September. These reforms, proposed by the Central Government to the GoMs, are based on three key pillars. Structural reforms: The reforms will correct inverted duty structures to cut input tax credit accumulation and boost domestic value addition, resolve classification issues for simpler compliance and fewer disputes, and ensure stability & predictability in GST policy to strengthen industry confidence and long-term planning. Rate rationalisation: The rate rationalisation exercise aims at providing greater relief to the common man, farmers, the middle class, and MSMEs, while ensuring a simplified, transparent, and growth-oriented tax regime. This would enhance affordability, boost consumption, and make essential and aspirational goods more accessible to a wider population. Ease of living: The upcoming GST reforms will ensure seamless, tech-driven, and time-bound registration, introduce pre-filled returns to reduce errors and mismatches, and enable faster, automated refunds, all aimed at simplifying compliance, supporting businesses, and enhancing the overall ease of living and doing business. "The Central Government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism," the Ministry of Finance posted on X.

Telangana Deputy CM Mallu Bhatti Vikramarka also confirmed that the GoM proposed a complete exemption on health and life insurance for individuals.

GoM proposes exempting GST on health, life insurance for individuals

India's central government has proposed to bring down GST rates for the majority of goods and services in a bid to boost internal consumption to spur the world's fastest-growing economy. Many goods and services, including cars, are likely to get cheaper from October if the proposal is implemented.<h2>What's GST?</h2>The GST regime was implemented in 2017. It subsumed over a dozen domestic state taxes under the principle "one nation, one tax and one market".&nbsp;The system categorizes goods and services into four slabs: 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The government also imposes additional levies in the form of cess on several luxury goods. It was, however, being criticized for being too complex.&nbsp;Last year, a controversy erupted over how popcorn was being taxed. Pre-packaged salted popcorn is taxed at 12%, but caramel one at 18%. Similarly, plain Indian flatbreads attract a 5% tax, but the flaky, multi-layered variety faces a levy of 18%, pointed out Reuters, in its report on GST.&nbsp;<a href="https://www.wionews.com/business-economy/how-cheaper-will-cars-become-if-gst-rates-are-reduced-by-diwali-1755602970051">Also read: How cheaper will cars become if GST rates are reduced by Diwali?</a><h2>All you need to know about the proposed reforms</h2>The government is reportedly mulling abolishing the 28 per cent tax slab. Articles like cars, air conditioners, and refrigerators fall into this category. Such products will likely be moved into a new category -- 18 per cent. So these goods will become cheaper.99 per cent of products that are taxed at 12 per cent will move into the 5 per cent bracket. These items will include butter, fruit juices, and dry fruits. Small cars will also become cheaper as they will be moved into the 18 per cent GST slab.<h2>What will become cheaper?</h2>Personal care items like hair oil and toothpaste, and construction goods like cement, will likely become cheaper. Televisions may also become cheaper.&nbsp;Sewing machines, pressure cookers, and small washing machines might also become cheaper, reported NDTV.&nbsp;Bicycles, budget garments, budget footwear, vaccines, tiles, agricultural tools, mobile phones, and computers can also attract lesser taxes.

India's central government has proposed to bring down GST rates for the majority of goods and services in a bid to boost internal consumption to spur the world's fastest-growing economy.

India's central government has proposed to bring down GST rates for the majority of goods and services in a bid to boost internal consumption to spur the world's fastest-growing economy. Many goods and services, including cars, are likely to get cheaper from October if the proposal is implemented. What's GST? The GST regime was implemented in 2017. It subsumed over a dozen domestic state taxes under the principle "one nation, one tax and one market". The system categorizes goods and services into four slabs: 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The government also imposes additional levies in the form of cess on several luxury goods. It was, however, being criticized for being too complex. Last year, a controversy erupted over how popcorn was being taxed. Pre-packaged salted popcorn is taxed at 12%, but caramel one at 18%. Similarly, plain Indian flatbreads attract a 5% tax, but the flaky, multi-layered variety faces a levy of 18%, pointed out Reuters, in its report on GST. Also read: How cheaper will cars become if GST rates are reduced by Diwali? All you need to know about the proposed reforms The government is reportedly mulling abolishing the 28 per cent tax slab. Articles like cars, air conditioners, and refrigerators fall into this category. Such products will likely be moved into a new category -- 18 per cent. So these goods will become cheaper. 99 per cent of products that are taxed at 12 per cent will move into the 5 per cent bracket. These items will include butter, fruit juices, and dry fruits. Small cars will also become cheaper as they will be moved into the 18 per cent GST slab. What will become cheaper? Personal care items like hair oil and toothpaste, and construction goods like cement, will likely become cheaper. Televisions may also become cheaper. Sewing machines, pressure cookers, and small washing machines might also become cheaper, reported NDTV. Bicycles, budget garments, budget footwear, vaccines, tiles, agricultural tools, mobile phones, and computers can also attract lesser taxes.

The Goods and Services Tax (GST) regime was proposed in 2017. It entailed four tax slabs for all goods and services. However, over the past eight years, it has been criticised for being too complex. Hence, the BJP-led central government has proposed a reform by Diwali.

GST reforms proposed: What will become cheaper after tax reduction?

To boost consumer spending, the BJP-led Central government is reportedly mulling simplifying the Goods and Services Tax (GST) structure by reducing the number of slabs, If approved, the new slabs will bring down the prices of passenger vehicles, especially cars. Here's how the lowering of GST on cars will impact their prices.<h2>What's the government's proposal on GST?</h2>The current GST structure divides goods and services into four slabs -- 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The government is mulling over reducing the number of these slabs and categorising things into two main slabs -- 5 per cent and 18 per cent. A special 40 per cent slab for luxury goods will likely be introduced as well.&nbsp;99 per cent of goods and services taxed at 12 per cent may shift to the 5 per cent slab. 90 per cent of articles currently being taxed at 28 per cent might be shifted to the 18 per cent slab.<h2>How the proposed changes will impact car prices?</h2>Small cars, which attract&nbsp;28 per cent GST and an additional cess, will be moved into the 18 per cent tax bracket if the proposal is approved. However, luxury cars and SUVs might attract a 40 per cent tax.&nbsp;A report by HSBC claims that the prices of small cars may drop by at least 8 per cent. The cess can be cancelled for all cars.&nbsp;The bigger and more luxurious cars can also see a reduction in taxes in the range of 3-5 per cent.&nbsp;All two-wheeler manufacturers&nbsp;will also benefit from the reduction in GST. Domestic players will gain relatively more.&nbsp;Another scenario the report mentioned is that the government might introduce a flat reduction of GST from 28 per cent to 18 per cent across all categories of cars. In this case, the prices of cars might come down by a factor of 6-8 per cent.

To boost consumer spending, the BJP-led Central government is reportedly mulling simplifying the Goods and Services Tax (GST) structure by reducing the number of slabs in the regime.

To boost consumer spending, the BJP-led Central government is reportedly mulling simplifying the Goods and Services Tax (GST) structure by reducing the number of slabs, If approved, the new slabs will bring down the prices of passenger vehicles, especially cars. Here's how the lowering of GST on cars will impact their prices. What's the government's proposal on GST? The current GST structure divides goods and services into four slabs -- 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The government is mulling over reducing the number of these slabs and categorising things into two main slabs -- 5 per cent and 18 per cent. A special 40 per cent slab for luxury goods will likely be introduced as well. 99 per cent of goods and services taxed at 12 per cent may shift to the 5 per cent slab. 90 per cent of articles currently being taxed at 28 per cent might be shifted to the 18 per cent slab. How the proposed changes will impact car prices? Small cars, which attract 28 per cent GST and an additional cess, will be moved into the 18 per cent tax bracket if the proposal is approved. However, luxury cars and SUVs might attract a 40 per cent tax. A report by HSBC claims that the prices of small cars may drop by at least 8 per cent. The cess can be cancelled for all cars. The bigger and more luxurious cars can also see a reduction in taxes in the range of 3-5 per cent. All two-wheeler manufacturers will also benefit from the reduction in GST. Domestic players will gain relatively more. Another scenario the report mentioned is that the government might introduce a flat reduction of GST from 28 per cent to 18 per cent across all categories of cars. In this case, the prices of cars might come down by a factor of 6-8 per cent.

New GST slabs proposed: The Central government has reportedly proposed to lower GST rates for majority of goods and services by Diwali. It will likely introduce two new slabs under the GST regime. It might also introduce a separate slab for luxury goods, including tobacco products.

How cheaper will cars become if GST rates are reduced by Diwali?