New Delhi – The Group of Ministers (GoM) on GST rate rationalisation has supported the Union Government’s proposal to simplify the tax structure by reducing slabs from four to two. Under the plan, the 5% and 18% slabs will replace the existing 5%, 12%, 18% and 28% structure, while a special 40% rate will continue on demerit goods such as tobacco and luxury cars.
West Bengal Finance Minister Chandrima Bhattacharya said all members backed the reforms but stressed that the impact on revenue must be calculated. She suggested amendments to impose additional duties on sin and luxury goods, which earlier faced taxes of over 40% including cess, to cover any shortfall.
The GoM, chaired by Bihar Deputy Chief Minister Samrat Choudhary, includes finance ministers from Uttar Pradesh, Rajasthan, Karnataka, Kerala, and West Bengal. The panel is reviewing the Centre’s plan to shift nearly all items from the 12% slab to 5% and most goods from the 28% slab to 18%. Its recommendations will be submitted to the GST Council in September.
Prime Minister Narendra Modi has termed the reforms a “Diwali gift” for small industries and consumers. The changes are expected ahead of the March 2026 expiry of the compensation cess regime. The GST Council, chaired by Finance Minister Nirmala Sitharaman, will take the final call, with exemptions on health and life insurance also on the agenda.
