Prime Minister Narendra Modi, in his Independence Day address from the Red Fort, announced that India will soon witness major Goods and Services Tax (GST) reforms aimed at easing the burden on the middle class. Calling it a “double Diwali” gift, PM Modi said the next-generation changes will significantly lower taxes nationwide.
The reforms, in discussion for months, are expected to restructure GST slabs and simplify the eight-year-old system. According to reports, one key proposal is to remove the 12% slab, shifting products either to 5% or 18%. This could make several currently mid-range taxed items more affordable for consumers. The existing GST framework has five primary rates—nil, 5%, 12%, 18%, and 28%—plus special rates for precious metals.
A group of state ministers, led by Bihar Deputy CM Samrat Chaudhary, is set to meet next week to discuss the changes. While some Opposition members suggest keeping current slabs to avoid revenue losses, others are focusing on areas with minimal resistance, such as lowering or removing GST on health and term life insurance.
Authorities are also reviewing the cess on luxury and harmful products, currently extended until March 31, 2026, to repay Covid-era debts. Strong economic indicators and stable tax collections make this an opportune time for reform, especially with upcoming free trade agreements on the horizon.
If implemented, these measures could benefit millions of households while boosting domestic industry competitiveness in global markets.