GST Slab Update: Relief for the Common Man
The government is preparing a big relief for consumers by reducing the number of GST slabs from four to just two—5% and 18%. The existing 12% and 28% slabs will be completely removed.
On 21 August 2025, the Group of Ministers (GoM) accepted the Centre’s proposal to simplify GST rates. Under this change, most goods and services currently taxed at 12% will move to the 5% slab, while about 90% of items in the 28% category will shift to 18%. Only sin goods like tobacco and pan masala will continue to attract higher taxes.
During the meeting with Finance Minister Nirmala Sitharaman, Bihar Deputy CM Samrat Choudhary confirmed support for removing the 12% and 28% slabs. The proposal, along with states’ feedback, has now been forwarded to the GST Council for final approval.
What Will Get Cheaper?
1. Items shifting from 12% to 5% (approx. 7% tax cut):
- Clothing & readymade garments (including those priced above ₹1,000)
- Footwear
- Printing & stationery items
- Many processed food products
- Some home appliances (previously taxed at 12%)
➡ Impact: Major relief for the middle class, as many everyday essentials will become cheaper.
2. Items shifting from 28% to 18% (approx. 10% tax cut):
- Two-wheelers and entry-level cars
- Cement & building materials (boost for housing & real estate)
- Consumer durables like fridge, washing machine, ACs, TVs
- Packaged food & beverages
- Paints & varnish
➡ Impact: Consumers will save more, while automobile and real estate sectors may see faster growth due to reduced costs.