The Goods and Services Tax (GST) Council, headed by Finance Minister Nirmala Sitharaman, is likely to roll out new GST rate slabs around September 22 to push festive demand in the country, NDTV Profit has reported citing government sources. The implementation is expected to coincide with the Navratri celebrations.
The GST Council will meet in the national capital on September 3-4 to deliberate on the Centre’s proposal for a simplified two-rate GST structure of 5% and 18%. According to the report, notifications on the new rates will likely be issued within five to seven days after the Council’s decision.
The Group of Ministers (GoM) on rate rationalisation, compensation cess, and health and life insurance met earlier this week and, in principle, agreed to the Centre’s plan for a two-slab GST.
As per the reforms proposed by the Centre, GST would move from the current four-tier structure of 5%, 12%, 18% and 28% to a two-rate system. Goods and services would be classified under ‘merit’ (5%) and ‘standard’ (18%) categories. A special 40% rate would apply on select luxury and sin goods such as ultra-premium cars, while certain labour-intensive items would continue to enjoy concessional rates as low as 0.1%, 0.3% or 0.5% to support employment-intensive sectors.
On Independence Day 2025, Prime Minister Narendra Modi had announced the upcoming reforms, describing them as ‘GST 2.0’. Calling GST one of the most significant reforms since its launch in 2017, he underscored the need for rationalisation to provide relief to the common man, farmers, the middle class, and MSMEs.
Finance Minister Nirmala Sitharaman has also said the new GST regime will make people self-sufficient and boost growth in manufacturing and MSMEs.
Speaking to Groups of Ministers (GoMs) on rate rationalisation, insurance taxation, and compensation cess, Sitharaman last week said the proposal by the central government is with a vision to usher in the next generation of GST reforms in India’s journey towards becoming the Atmanirbhar Bharat.
Exemption for Insurance Premiums For Individuals
Bihar Deputy CM Samrat Choudhary, who is also the convenor of insurance GoM, said the Centre has proposed exempting health and life insurance premiums from GST for individuals, to which some states differed. Currently, such premiums attract 18% GST.
“The Centre’s proposal is clear that the insurance sector’s individual and family (policies) should be exempt from GST. This has been discussed and the GoM report will be presented to the Council,” Choudhary told reporters last week after the GoM meeting.
The panel, comprising ministers from 13 states including Uttar Pradesh, West Bengal, Karnataka, Kerala and Tamil Nadu, will submit its report to the GST Council by October-end.
Union Minister of State for Finance, Chief Minister of Goa, Deputy CM of Bihar and Finance Ministers of States in the three GoMs were also present at the meeting.
