The Finance Ministry said on Friday that it has suggested a new GST framework to a group of ministers (GOM), which would have two slab tax rates and include special rates for some special things.
Prime Minister Narendra Modi announced on 79th Independence Day that improvement in GST will be implemented till Diwali. This will reduce the tax burden and benefit small industries. After the PM’s announcement, the Finance Ministry said that the proposal given to GOM is based on three things. The first is to improve the structure, to simplify tax rates and make the life of the third people easier. In the proposal, there is talk of reducing taxes on things needed by common people and ambitious things. It is suggested to reduce the slab and bring two levels on standard and merit. Special rates will apply to only a few select things.
There are 4 GST slabs right now
Currently, GST currently has 4 slabs, with 5%, 12%, 18% and 28% rates. The GST Council headed by Finance Minister Nirmala Sitharaman will hold a meeting in September, in which the proposal of GOM will be discussed. The ministry says that the government has got more flexibility with the end of the Compensation Cess, which will help to simplify and stabilize the tax rates.
Prime Minister Shri @narendramodiOn the Occination of 79th Independence Day, Highlighted How Goods and Services Tax (GST), Implemented in 2017, is a significant reform which has benefited the nation.
The Prime Minister underscored the important generation of reforms
– Ministry of Finance (@Finminindia) August 15, 2025
What is the benefit of industry and business?
The new GST system will fix inverted duty structure, tax classification quarrels will be reduced as well as it will make business planning easier with stability in rates. Online registration and pre-found returns will be available for MSME and Startups, which will save their time and money. Exporters will benefit from automated refund process.
What is the effect on revenue and economy?
In 2024-25, the GST collection reached a record level of 22.08 lakh crore with a growth of 9.4%. The government says that new reforms will increase consumption, economic activity will be faster and formalization in the country will get more speed. This will give boost to both revenue and economy.