GST: After Prime Minister Narendra Modi’s announcement to roll out GST reforms by Diwali, the Finance Ministry has suggested a new GST structure to the GoM which will have two-slab tax rates and special rates for certain items.

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The Finance Ministry said on Friday that it has suggested a new GST structure to the Group of Ministers (GoM). According to information received from government sources, now GST will have slabs of 5% and 18%. Let us tell you that Prime Minister Narendra Modi announced on the 79th Independence Day that the reforms in GST will be implemented by Diwali. This will reduce the tax burden and benefit small industries.

After the PM’s announcement, the Finance Ministry said that the proposal given to the GoM is based on three things. First is to improve the structure, second is to simplify the tax rates and third is to make people’s lives easier. The proposal talks about reducing tax on things needed by the common people and ambitious things. There is a suggestion to reduce the slab to two levels standard and merit. Special rates will be applicable only on selected things.

There are 4 GST slabs at present
At present there are 4 slabs of GST, which have rates of 5%, 12%, 18% and 28%. The GST Council headed by Finance Minister Nirmala Sitharaman will meet in September to discuss the proposal of the GoM. The ministry says that the end of compensation cess has given the government more flexibility, which will help in simplifying and stabilizing tax rates.

Prime Minister Shri @narendramodi, on the occasion of 79th Independence Day, highlighted how Goods and Services Tax (GST), implemented in 2017, is a significant reform which has benefited the nation.

The Prime Minister underscored the importance of the next generation of reforms

— Ministry of Finance (@FinMinIndia) August 15, 2025

What are the benefits to industry and business?

The new GST system will correct the inverted duty structure, reduce disputes over tax classification and make business planning easier due to stability in rates. Online registration and pre-filled returns will be available for MSME and startups, which will save their time and money. Exporters will benefit from the automated refund process.

What is the impact on revenue and economy?
In 2024-25, GST collection reached a record level of Rs 22.08 lakh crore with a growth of 9.4%. The government says that the new reforms will increase consumption, accelerate economic activity and give more speed to formalization in the country. This will boost both revenue and economy.