Recent GST Reforms (Effective 22 September 2025): The GST Council has implemented a major overhaul of India’s tax regime by reducing the number of tax slabs from four to two—5% (merit rate) and 18% (standard rate)—while retaining a steep 40% slab for sin and luxury items. These changes aim to make essentials such as packaged food, milk, medicines, toothpaste, and insurance more affordable, and in some cases, fully exempt. Significant relief also extends to vehicles (with small cars now taxed at 18% instead of 28%), appliances, TVs, cement, and renewable energy goods.
While the reforms are expected to stimulate demand—particularly during the festive season—they come with potential revenue loss and state budget impacts.