The GST Council has approved a major tax reform, moving to a simplified two-slab GST system. Industry bodies hailed the decision, saying it will cut compliance burdens, reduce disputes, and bring long-term clarity for businesses and consumers.
Finance Minister Nirmala Sitharaman said the new GST rates will take effect from September 22, 2025. The structure includes two key slabs—5% and 18%—and a 40% rate for sin and luxury goods such as tobacco, large cars, yachts, and helicopters.
The reform, often called GST 2.0, aims to lower the tax burden on essential goods while supporting MSMEs and households. Industry groups noted that stable and predictable rates will improve investment confidence and drive economic growth.
Stock markets reacted positively, with indices opening over 1% higher on Thursday, reflecting optimism about the GST Council’s reform package and its impact on the broader economy.