The Centre is reportedly considering a major overhaul in the Goods and Services Tax (GST) structure — a move that could change the prices of everyday items as well as luxury products. The proposed GST slab change aims to simplify the tax system, increase revenue efficiency, and adjust rates to match current economic realities.
Why the GST Slab Change Is Being Considered
Introduced in July 2017, GST replaced multiple indirect taxes with a unified structure. Currently, items fall under four main GST slabs: 5%, 12%, 18%, and 28%. However, over time, economic shifts, inflation, and demands from industry bodies have led to calls for a revision.
According to government sources, the GST Council is studying the impact of merging certain slabs and reassigning items to different tax categories. The goal is to:
- Simplify the tax system for businesses and consumers
- Improve revenue collection
- Ensure essential goods remain affordable
What Could Get Cheaper After the GST Slab Change
Reports suggest the GST slab change may bring relief to consumers on several products:
- Packaged Food Items – Certain processed food products currently taxed at 12% may move to 5%.
- Small Household Appliances – Basic appliances like mixers and ceiling fans could shift from 18% to 12%.
- Fertilisers & Agricultural Tools – Likely to be moved to a lower bracket to support the farming sector.
- Footwear Under ₹1,000 – Could see a reduction from 12% to 5%, making them more affordable for low-income consumers.
If approved, these changes would directly impact household budgets by lowering prices on common goods.
What Could Get Costlier
The GST slab change may also mean higher taxes on certain goods and services:
- Luxury and Premium Items – Products like high-end electronics, branded clothing, and imported goods may move from 18% to 28%.
- Online Gaming & Casinos – Tax rates may increase to curb excessive spending and generate higher revenue.
- Aerated Beverages – Already at the top slab, these could face an additional cess.
- Hotels Above ₹7,500 per Night – GST may rise from 18% to 28% to align with luxury categorisation.
These adjustments aim to target non-essential spending without burdening the common man.
Impact on Businesses
The GST slab change will require businesses to update billing software, reconfigure pricing strategies, and adjust supply chain costs. While some industries will welcome lower tax rates, sectors facing hikes may push back against the changes.
Economists also note that merging slabs could reduce disputes over classification — a frequent problem in GST compliance.
How the GST Slab Change Could Affect the Economy
If implemented well, the GST slab change could:
- Boost consumption of essential goods due to lower prices
- Improve tax compliance by simplifying structures
- Increase government revenue from luxury segments
- Reduce inflationary pressure in key consumer categories
However, analysts warn that if higher taxes on certain goods are too steep, demand could drop sharply in those sectors.
Timeline for GST Slab Change
The proposal is expected to be discussed in the upcoming GST Council meeting later this year. If approved, the new GST rates could be rolled out in phases from the next financial quarter.
Finance Ministry officials have indicated that public feedback will be considered before finalising changes.
Consumer Checklist for the GST Slab Change
Before the GST slab change takes effect, consumers should:
- Check updated price lists from retailers
- Plan major purchases like electronics or appliances accordingly
- Be aware of possible service cost hikes in hospitality or entertainment