On August 15, Prime Minister Narendra Modi announced GST reform from the ramparts of the Red Fort and proposed to implement two GST rates, 5% and 18%. After this, the proposal to abolish 12% and 28% GST slabs of the Center was also approved in the meeting of the GOM (GOM) held in Delhi on 20 and 21 August. Now a big update has surfaced about this. According to reports, the government is considering bringing textile and food products into 5% tax slab.
Considering cloth, food to cement
Under the next generation GST reforms, now to reduce tax burden on the common man, especially foods and clothes can be brought into 5% slab. According to a TOI report, the government is also evaluating GST rates on some commonly used services to see if they can be reduced from 18% to 5%. It is reported that this proposal may be discussed in the GST Council meeting to be held early next month. In addition, a plan to reduce GST on many other items including cement and widespread consumption services like salons and beauty parlors can also be discussed. Currently small salons are free from GST, but the rate of 18 percent on medium and high -grade salons is attached to GST, which directly costs customers. According to the report, GST on cement is proposed to be reduced from 28 percent to 18 percent. Let us tell you that it has been demanding for a long time of construction and infrastructure sector. In addition, if you look at other possible changes, GST on term insurance and health insurance policies can be eliminated, while up to 4 meters long smaller cars can live in 18% GST slab and large cars in 40% GST slab.
How much GST is there on sweets to clothes?
If we talk about GST applied on sweets and clothes now, GST is applicable at a rate of 5% on the brand without brand, while branded and packaged sweets come in 18% slab. Apart from this, carbonated drinks are also in this slab. Talking about clothes, they fall into tax slabs of 5% to 12% according to the price, such as 5% GST on clothes priced at Rs 1000 or less applies to 12% GST on clothes priced.
Decision in early September
The 56th meeting of the GST Council under the chairmanship of Finance Minister Nirmala Sitharaman is proposed on 3 and 4 September 2025 at 11 am and before that discussions are to be held with GST officials in New Delhi on 2 September. However, the detailed agenda and location of the GST Council meeting are yet to be announced. Significantly, according to the Finance Ministry, the new GST structure will affect the income of the central and state governments. The Fitment Committee of GST Secretariat officials has prepared a draft of this loss, which estimates revenue loss of about Rs 40,000 crore.
The gift will be available before Diwali!
According to sources associated with the government, the Center aims to implement GST rate cuts before Dussehra-Diwali. This year Diwali will be celebrated on October 21 and this step taken by the government towards GST reform can prove to be a relief gift for consumers and businessmen. Prime Minister Modi also said in his speech on Independence Day that the government will bring the GST reform of the next generation, which will reduce the tax burden on the common man. This will be the gift of Diwali to the countrymen from the government.
