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Stay ahead in your UPSC CSE preparation with our daily News Summary. Designed to save time, it highlights key national and international events from leading newspapers and government websites.
GST Reforms 2025 or Next-Gen GST Reforms
- The 56th meeting of the GST Council was held on September 3-4, 2025, in New Delhi → approved Next-Gen GST reforms proposed by the Centre and announced by PM Modi on 15 August 2025.
- Expected to benefit the farmers, MSMEs, women, youth, and middle-class families, and strengthen India’s long-term growth.
- GST structure is simplified to a two-slab system of 5% and 18%, removing the earlier 12% and 28% rates.
- Additionally, a 40% tax is imposed on luxury and sin goods such as pan masala, tobacco, aerated drinks, high-end cars, yachts, and private aircraft.
- Revised rates will come into effect from 22nd September 2025 → Exceptions: new rates will be implemented at a later date to be notified, for certain goods including cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and beedi.
7 Pillars of Next-Gen GST Reforms:
- Building on the success of GST
- Rationalizing rates for fairer taxation
- Simplifying filing through technology
- Putting consumers first
- Empowering MSMEs and manufacturers
- Stronger states stronger Bharat
- Lower taxes = higher spending
Key highlights:
- GST simplified to a two-slab structure (5% & 18%)
- GST reforms cut taxes on household essentials (soaps, toothpaste, Indian breads) to 5% or Nil boosting affordability
- Life-saving drugs, medicines reduced from 12% to Nil or 5% making healthcare affordable
- Two-wheelers, small cars, TVs, ACs, cement cut from 28% to 18% bringing relief to middle-class.
- Farm machinery, irrigation equipment cut from 12% to 5%, reducing farming costs
- Tobacco, pan masala, aerated drinks, and luxury goods taxed at 40%.
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