SDG 8: Decent Work and Economic Growth
Institutions: Ministry of Finance
In its 56th meeting, the GST Council approved sweeping reforms to simplify Indiaβs Goods and Services Tax regime. The Council recommended replacing the current four-tiered tax structure with a more efficient system featuring a standard rate of 18 percent and a concessional merit rate of 5 percent, along with a separate de-merit rate of 40 percent for select goods. The Council also endorsed tax exemptions on essential services and goods, including all individual life and health insurance policies. Specific rate reductions were proposed for goods ranging from agricultural machinery and renewable energy devices to daily necessities like soaps, toothpaste, and UHT milk, with many moving to the merit or zero rate bracket to ease compliance and reduce costs for citizens. Additionally, procedural enhancements were endorsed, such as phased implementation of the new rates starting 22 September 2025, operationalization of the GST Appellate Tribunal, and benefit schemes for simplifying refunds and GST registration for small and low-risk businesses. These structural and procedural changes are aimed at enhancing ease of doing business, supporting economic inclusivity, and reducing tax burden on the most vulnerable.
Relevant Question for Policy Stakeholders: How can the transition to a simplified GST structure and improved institutional mechanisms be implemented effectively across states, ensuring that benefits flow to common citizens, MSMEs, and sectors critical to economic growth?
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Recommendations of the 56th Meeting of the GST Council