GST Council meeting to decide on rate cuts, rationalisation begins. What to expect

The GST Council meeting brings together the union and state finance ministers for a singular agenda of GST reforms, including rate rationalisation, simpler compliance, and potential new compensation mechanisms. An officers’ meeting was held on Tuesday to lay the groundwork before the council meets.

A two-slab structure is being proposed—5% for essential goods and 18% for non-essentials— from four slabs of 5%, 12%, 18% and 28% at present. An additional slab of 40% is likely for so-called “sin goods” like tobacco and cars priced ₹50 lakh and above.

The fitment panel has already approved moving to this two-tier structure.

GST on essential items—toothpaste, shampoo, talcum powder, soaps—are now likely to be in the 5% bracket from 18% earlier. GST on butter and cheese, as well as ready-to-eat foods (pickles, snacks, chutney, etc.) may also come down to 5% from 12% and 18% now.