Massive GST Rate Cut Proposed On Over 150 Items; Revenue Hit Pegged At Rs 50,000–60,000 Crore

The GST Council is all set to take a final call during its crucial two-day meeting on Sept. 3-4 on the Centre’s proposal to slash GST rates on more than 150 items as part of its comprehensive rate rejig exercise. The move aims to ease the tax burden on households and spur consumption ahead of the festive season.

The proposals include shifting several items from the higher 12% and 18% GST slabs to the 5% slab or even to the Nil GST category, which means complete exemption. 

A significant part of the plan is the expansion of the Nil GST category. Among the items proposed to be fully exempt from GST are commonly consumed food items such as loose paneer, khakhra, pizza bread, chapati, and roti, all of which currently attract 5% to 18% GST.

Also on the list are ready-to-eat foods like paratha and parotta, which are presently taxed at 18%. These may now be fully exempt, benefiting households and small food vendors alike.

The education sector is also expected to benefit, with items such as maps and globes, pencil sharpeners, exercise books, graph books, and lab notebooks proposed to move from 12% GST to nil. This could provide meaningful cost savings for students and parents, especially ahead of the new academic year.

Apart from exemptions, the government is also pushing for a rate reduction from 12% to 5% on several essential food items. These include butter, condensed milk, jams, namkeens, mushrooms, dates, and various nuts. These are widely consumed across Indian households, and the rate cut is expected to bring down prices noticeably.

Besides, the Centre has also proposed lowering the GST on several confectionery and dessert items from 18% to 5%. These include chocolates containing cocoa, pastries, ice cream, and breakfast cereals like cereal flakes. This could lead to a drop in prices of popular packaged treats and breakfast options, appealing especially to urban consumers and younger demographics.

These wide-ranging rate cuts will be placed before the GST Council, which includes both Central and State representatives. If approved, the revised GST structure could be rolled out around September 22.

If approved, this would mark one of the biggest GST reform moves since the tax’s introduction in 2017, significantly altering the way essential and everyday items are taxed and offering direct savings for millions of Indian households.