GST new slabs
There is going to be a big change in GST rates, which will reduce tax on common household goods and services. This can reduce retail inflation from 0.65 to 0.75 percent in the next financial year (2025-26). According to a report by SBI Research, inflation will be reduced in the country after the new GST rules are implemented.
The 56th meeting of the GST Council removed the old four -tier tax structure (5%, 12%, 18%, 28%) and approved two -tier tax structure (5%and 18%). Also, a special tax rate of 40% has been fixed for some luxury goods and services, under which a lot of daily things have become cheaper and some have become tax free.
When will the new rates be implemented?
The new tax rates will be applicable from 22 September 2025, except for tobacco and related products. The report says that the GST rate of 453 goods has changed. Out of these, tax on 413 goods has decreased, while tax on only 40 goods has increased. GST on about 295 essential goods has come down from 12% to 5% or 0%. This will provide 60% benefit to customers, especially on food and drink, which can reduce consumer value index-based inflation from 0.25 to 0.30%.
What will be the effect on retail inflation?
The SBI Research Report said that in addition, making GST rates on services will reduce retail inflation on other goods and services by 0.40 to 0.45 percent. In this, customers have been estimated to get 50 percent benefit. According to the report, in total, retail inflation can decrease from 0.65 to 0.75 percent during the financial year 2026-27.
What was the average rate of GST?
The average GST rate in September 2019 had come down from 14.4% to 11.6% due to the rate rationalization of GST Council. Now after new changes, it can be reduced to 9.5%. The new GST rules will make the essential goods and services cheaper, which will reduce inflation and benefit the common people.