GST Council Meeting Begins: What’s on the Agenda, What FM Nirmala Sitharaman Could Announce, and How It May Impact Your Wallet

The 56th meeting of the Goods and Services Tax (GST) Council began this Wednesday morning, September 3, in New Delhi, chaired by Union Finance Minister Nirmala Sitharaman.

The two-day meeting, running from September 3 to 4, is expected to shape India’s next-generation GST reforms, with structural changes, tax rate rationalisation, and compliance simplification at the heart of discussions.

The meeting follows Prime Minister Narendra Modi’s Independence Day address, in which he stressed the importance of GST reforms for the benefit of the common man, farmers, middle class, and MSMEs. Modi had also promised a “big Diwali gift” in the form of tax relief, particularly on essential goods and services.

Centre’s Push for Next-Gen GST Reforms
The Central Government has outlined a reform agenda based on three pillars: structural reforms, rationalisation of GST rates, and ease of living. A recent Group of Ministers (GoM) meeting supported these proposals, underscoring the government’s focus on building an Atmanirbhar Bharat.

Speaking at an event in Chennai yesterday, Finance Minister Nirmala Sitharaman reiterated the government’s commitment to making tax processes more transparent and business-friendly. “The planned rollout of the next generation of GST reforms with a council meeting tomorrow and the day after… in the coming months, there will be further reduction in compliance burden, making it easier for small businesses to thrive,” she said.

Major Rate Restructuring on the Cards
According to government sources cited by ANI, one of the most significant proposals on the table is the reduction of GST slabs from four to two. Currently, the indirect tax regime includes slabs of 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The government aims to retain only two slabs, 5 per cent and 18 per cent.
Sources revealed that 99 per cent of goods under the 12 per cent slab may be shifted to the 5 per cent category, while 90 per cent of items in the 28 per cent slab could move to the 18 per cent category.

However, a new 40 per cent slab is being proposed for so-called “sin goods” like tobacco and pan masala, ensuring higher taxation on products deemed harmful to public health.
 

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Relief for Consumers and Businesses
The rationalisation of GST slabs is being projected as a major step toward lowering tax burdens for both consumers and businesses. Essential consumer goods, which currently face higher taxation, are likely to become cheaper under the new system. Small businesses and MSMEs are expected to benefit from simplified compliance mechanisms and reduced paperwork, giving them more room to expand and innovate.

A report by ANI also highlighted that the Council’s reforms aim to streamline India’s indirect tax regime, cutting down complexity and enhancing efficiency. This is in line with the Finance Ministry’s stated goal of creating a “simple, stable, and transparent tax system for inclusive growth and ease of doing business across the country.”

Political and Economic Significance
The timing of the GST Council’s deliberations is politically significant, with Diwali being set as the milestone for announcing next-generation reforms. Prime Minister Modi has framed these reforms as a step toward strengthening the economy and providing relief to ordinary citizens. His emphasis on GST’s role in boosting India’s economic resilience reflects the government’s ambition of aligning tax policy with developmental goals.

Meanwhile, industry experts and economists will be closely watching the outcomes of this meeting, as a two-slab GST structure could substantially reshape pricing strategies, supply chains, and consumer demand across sectors.

Looking Ahead
As the 56th GST Council meeting gets underway today, all eyes are on the potential decisions that could redefine India’s indirect tax structure. The Council’s consensus will determine whether the government can move ahead with its bold plan to simplify GST and align it more closely with India’s growth aspirations.

The expected Diwali rollout of reforms promises to be one of the most significant changes in India’s tax system since the introduction of GST in 2017, potentially marking the beginning of a more transparent, efficient, and inclusive tax regime.