The GST Council is expected to decide this week on a proposal to reduce rates on more than 150 items as part of a comprehensive overhaul of the tax structure. The Centre has proposed shifting various goods from the 12 percent and 18 percent slabs to the 5 percent or nil GST category, aiming to ease household tax burdens and stimulate spending ahead of the festive season.
The restructuring plan includes expanding the nil GST category to cover commonly consumed food items such as loose paneer, khakhra, pizza bread, chapati, and roti, which currently attract rates between 5 percent and 18 percent. Ready-to-eat foods like paratha and parotta, now taxed at 18 percent, are also under consideration for exemption.
Items such as butter, condensed milk, jams, nuts, namkeens, mushrooms, and dates may see their GST rate reduced from 12 percent to 5 percent. Popular packaged snacks, confectionery, breakfast items, and desserts—including cocoa chocolates, pastries, ice cream, and cereal flakes—are proposed to move from the 18 percent slab to 5 percent, targeting relief for urban consumers and younger demographics.
The proposal also includes lowering GST on entry-level passenger vehicles and two-wheelers to 18 percent. Currently, all combustion engine vehicles are taxed at 28 percent plus a compensation cess ranging from 1 percent to 22 percent based on specifications.
In the education sector, items like maps, globes, pencil sharpeners, exercise books, graph books, and lab notebooks are proposed to be moved from the 12 percent slab to nil GST, offering cost relief to students and families ahead of the academic year.
The revised rate structure, which aims to replace the current four-slab system with a simplified two-rate model, will be presented to the GST Council comprising Central and State representatives. If approved, implementation is expected by September 22.
