Finance Minister Nirmala Sitharaman is leading a GST Council meeting on September 3 and 4, 2025, in New Delhi. The goal is to make the GST system simpler and fair.

Right now, GST has four tax rates: 5%, 12%, 18%, and 28%. The new plan is to have only two main rates:

• 5% for essential items (like food, soap, toothpaste)
• 18% for other items (like electronics, cement, and cars)

A 40% rate may be added for luxury and harmful goods (like tobacco and expensive cars).

What Could Get Cheaper?

• Toothpaste, shampoo, soap → from 18% to 5%
• Butter, cheese, snacks → from 12%/18% to 5%
• TVs, ACs, fridges, washing machines → from 28% to 18%
• Cement → from 28% to 18%

Changes for Vehicles

• Small petrol and hybrid cars → from 28% to 18%
• Electric cars ₹20–40 lakh → may increase from 5% to 18%
• Luxury electric cars (like Tesla) → could face 40% GST
• Two-wheelers → may go from 28% to 18%
• Heavy bikes (over 350cc) → might be taxed at 40%

Why These Changes?

• To make GST easier to follow
• To help consumers pay less
• To support business growth
• To balance the impact of global tariffs on India

Will the Government Lose Money?

Yes, there may be some loss in revenue (up to ₹1.7 lakh crore). But experts believe more people will buy goods, so the loss can be covered. States may get help from a special GST fund.