SDG 9: Industry, Innovation & Infrastructure | SDG 8: Decent Work & Economic Growth
Institutions: Ministry of Finance | Ministry of Coal | Ministry of Culture & Transport
The 56th GST Council meeting approved sweeping tax reforms across coal, tourism, transport, and cultural sectors.
In the coal sector, the ₹400/tonne GST Compensation Cess has been removed, and the GST rate on coal has been raised from 5% to 18%. The change corrects inverted duty distortion, releases blocked input tax credits, and lowers the burden on power generation-leading to estimated reductions of 17–18 paise per kWh in costs.
In parallel, tax cuts were introduced for hospitality, public transport, and cultural goods. Hotels with tariff below ₹7,500/day will move from 12% GST to 5% (without ITC). Buses with seating capacity over 10 will shift from 28% to 18% GST. Statues, prints, engravings, and stone art-used in artisans’ productions-will see GST cut from 12% to 5%.
These GST changes realign India’s tax structure toward equity and efficiency, balancing relief for consumers (tourism, artisans) with reform in core sectors (coal). They open space for structural adjustments in state revenues, demand stimulation in service & cultural sectors, and more viable coal operations. They also underscore the evolving role of GST as a tool for sectoral policy, not just revenue.
Relevant Question for Policy Stakeholders:
How can the central and state governments harmonize these reforms with state-level tax bases, ensure compensatory mechanisms, and monitor sectoral shifts in revenue and demand?
Follow the full news here:
GST Reform in Coal Sector
GST Reforms to Strengthen Hospitality, Transport and Cultural Sectors – PIB