The government is weighing a major overhaul of GST slabs that could bring immediate relief to middle- and lower-income households, with the 12% tax category on daily-use goods potentially on the chopping block.
According to sources, the Centre is seriously considering a restructuring of Goods and Services Tax (GST) rates, particularly aimed at easing the burden on essential goods used by average Indian households.
Currently, many of these everyday products fall under the 12% GST bracket. The proposal under discussion would either shift a majority of these goods to the 5% slab or eliminate the 12% slab entirely.
“Most of the goods commonly used by the middle and lower-income population are in the 12% category,” a senior official familiar with the matter told reporters. “A move to the 5% slab could provide significant cost relief.”
The timing is also critical. A decision could come as early as the upcoming 56th meeting of the GST Council, expected later this month. A mandatory 15-day notice is required for such a meeting, and preparations are already underway.
If implemented, the change would not only streamline the GST structure but also provide a clear signal that the government is addressing inflation concerns head-on—especially as rising living costs continue to strain household budgets.
The proposal is part of a broader reassessment of GST rates, which could eventually lead to a more compact three-tier system, with potential slabs like 8%, 16%, and 24%, or 9%, 18%, and 27%, sources said.
While final approval will depend on consensus within the GST Council, the tone from the Centre suggests urgency and political will to move forward.
