GST Council Approves Two-Tier Tax Structure; Cuts Rates On Consumer Goods

The GST Council approved a two-tier tax structure of 5 per cent and 18 per cent on Wednesday. The new rates will apply from 22 September.

India cut taxes on hundreds of consumer goods, including soaps and small cars. The move aims to boost domestic demand and counter the impact of US tariffs.

Revenue Loss Pegged at ₹47,700 Crore

West Bengal Finance Minister Chandrima Bhattacharya said the tax cut will cost ₹47,700 crore in revenue. She explained that the new GST rates will apply from 22 September.

Bihar Deputy Chief Minister Samrat Choudhary said all states supported the decision. He called the rate cut a consensus move.

Uttar Pradesh Finance Minister Suresh Khanna said no decision has been made on taxes for demerit goods. He added that any levy above 40 per cent will be decided later.

Long GST Council Meeting

The 56th GST Council meeting lasted 10.5 hours. The Centre and states debated and cleared key tax proposals.

Officials said the cuts will help sustain consumption. They also aim to protect the economy from external shocks caused by US tariff actions.

The decision marks a major step in India’s tax reform. It shows the government’s effort to balance fiscal stress with economic growth.

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