The proposal of the Central Government to rationalize GST rates has been approved by the Group of Ministers (GoM) of State Finance Ministers. Under this proposal, the existing GST slab structure of 5%, 12%, 18%, and 28% will be replaced with only two slabs – 5% and 18%.

As per the new structure, essential commodities will attract 5% GST, while general goods will be taxed at 18%. In addition, there are discussions on imposing up to 40% tax on certain harmful products such as tobacco.

A six-member panel of ministers headed by Bihar Deputy Chief Minister Samrat Choudhary has given its consent to this proposal.

Finance Minister Nirmala Sitharaman stated, “Rationalizing the slabs will provide significant relief to the common people, farmers, the middle class, and the Micro, Small and Medium Enterprises (MSME) sector. It will also ensure a simple and transparent tax system.”