PM Modi announces GST Council's approval of rate rationalisation and reforms

Prime Minister Narendra Modi, in a post on X, announced that the GST Council has approved the Union Government’s proposal for broad-based rate rationalisation and process reforms under the Goods and Services Tax (GST) framework. These reforms are intended to simplify the tax structure, enhance ease of doing business, and reduce the compliance burden on taxpayers, particularly small traders and businesses.

As part of the rationalisation, the GST Council has decided to abolish the 12% and 28% tax slabs. The revised tax structure will retain only two standard slabs—5% and 18%—to streamline the taxation system. Additionally, a new 40% tax slab will be introduced for automobiles and “sin goods,” including cigarettes and tobacco products.

According to the government, the reforms are designed to benefit a broad spectrum of society, including the common man, farmers, MSMEs, women, youth, and the middle class. They are also expected to promote economic growth and improve the overall ease of living.

Also Read: GST Council slashes tax slabs to two to spur consumption; announces key measures for middle class

The Prime Minister stated, “During my Independence Day speech, I had spoken about our intention to bring the next-generation reforms in GST.” He further added, “Glad to state that the GST Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts and reforms.”

During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST.

The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and…

— Narendra Modi (@narendramodi) September 3, 2025