GST Reforms: Check Out Item-Wise Proposed Rates To Be Taken Up In Next Meeting

The 56th meeting of the GST Council is scheduled to take place in New Delhi on September 3–4. The meeting is expected to focus on a major overhaul of the indirect tax structure, with the Centre pushing for a simplified two-rate system to replace the existing four-slab framework.

At the heart of the discussion will be the Group of Ministers’ recommendation to retain only the 5% and 18% GST slabs, effectively eliminating the 12% and 28% categories.

In addition, the GoM has proposed a flat 40% levy on select luxury and sin goods, streamlining the current structure that includes a 28% base rate plus a variable cess.

Among other notable proposals is the plan to bring several daily-use items under the nil GST bracket. Products such as loose paneer, pizza, bread, khakhra, chapati, and roti, which are currently taxed at 5% or 18% could soon be exempt from GST.

Education-related materials are another focus area, with items like maps, globes, pencil sharpeners, exercise books, graph books, and lab notebooks all currently taxed at 12%, likely to be exempted entirely. Household food items may also see significant relief.

Dairy products such as butter and condensed milk, packaged foods like jams and namkeens, and health-focused items including mushrooms, dry fruits, dates, and nuts are proposed to be taxed at 5%, down from the current 12%.

The confectionery and frozen dessert segment could benefit as well, with chocolates, pastries, ice cream, and breakfast cereals all proposed to be taxed at 5%, compared to the current 18%

In the automobile sector, GST on small cars, motorbikes, and auto parts may be reduced from 28% to 18%, while luxury vehicles and high-end bikes could face a flat 40% rate, replacing the current 28% plus cess structure.