A major consensus has been reached in the GST Council meeting that began on Wednesday. On September 3, the GST Council approved tax slabs of 5 percent and 18 percent, removing the slabs of 12 percent and 28 percent.
The 12 percent and 28 percent slabs have been abolished. Both the new slabs will now be effective from September 22, 2025. Giving information late night after the meeting, Finance Minister Nirmala Sitharaman said that this reform in GST has been done to make the life of the common people easier and to provide relief.
Preparations for relief to MSME and startups as well
Apart from this, efforts are also being made to benefit MSME and startups in today’s meeting. The council has also approved several important measures to reduce the compliance burden on businesses. According to the information, GST registration of MSME and startups will now be possible in just 3 days. Currently it takes up to 30 days. This causes problems for small businessmen. Apart from this, the GST Council has agreed to settle the refunds stuck under the inverted duty structure for textiles, pharma, chemicals, fertilizers and other industries in seven days.
Will tax on luxury electric vehicles increase?
The country’s leading electric vehicle manufacturers – Tata Motors, Mahindra & Mahindra, JSW MG Motor, BYD, Mercedes-Benz, BMW, and Tesla, which recently entered India, may soon face a major setback. It is reported that in the upcoming meeting of the GST Council, a proposal to increase the GST rate on luxury EVs (electric vehicles) priced above ₹ 20 lakh from 5% to 18% will be put up for discussion.
Demand raised for compensation of revenue loss
According to reports, eight states – Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, West Bengal and Karnataka have requested the central government to compensate them for the revenue loss if the proposal to rationalise the Goods and Services Tax (GST) structure is passed in the ongoing GST Council meeting on September 3 and 4.
