The government is planning major reforms in the GST system, with the Group of Ministers (GOM) expected to approve recommendations on September 3-4, 2025.
One key proposal is to remove the 12% and 18% GST slabs, which would lead to changes in GST rates on many products.
Items That May Become Cheaper
The government aims to reduce GST rates on several items without losing much revenue, supporting economic growth.
For example, fertilizer acids (currently 18%) and bio-pesticides (currently 12%) may see their GST rates cut to 5%. This would lower input costs for farmers.
Renewable energy products like solar cookers and solar water heaters (currently taxed at 12%) may have their GST reduced to 5% to encourage green energy use.
In textiles, GST on items like synthetic yarn, sewing threads, carpets, and rubber threads could fall from 12% to 5%, giving relief to the textile industry.
Items That May Become Costlier
GST on coal, briquettes, and solid fuels, currently at 5%, may increase to 18%. This hike will help balance the revenue loss from other GST reductions.
On apparel, the GST limit for the 5% rate (currently for clothes costing up to Rs 1,000) may be raised to Rs 2,500. But GST on apparel costing above Rs 2,500 could rise from 12% to 18%.
For footwear, GST on items costing less than Rs 2,500 may be reduced from 12% to 5%, but footwear costing above Rs 2,500 might see an increase from 12% to 18%.
What’s Next?
The GST Council will meet in Delhi on September 3 and 4, 2025, to finalize these proposals.
The government is expected to officially announce the changes by the end of next month.
