India to Implement Two-Slab Goods and Services Tax System

September 3, 2025 - 17:38

NEW DELHI - Indian Finance Minister Nirmala Sitharaman announced on Wednesday that the country's Goods and Services Tax (GST) will transition to a simplified two-slab system when the new rates take effect. This significant reform aims to streamline the tax structure and make compliance easier for businesses and consumers alike.

During a press briefing, Sitharaman revealed that the decision to reduce the rates of the consumption tax was reached unanimously by the GST council, which comprises ministers from various states. The move is expected to enhance the ease of doing business in India and stimulate economic growth.

Additionally, she highlighted that items currently categorized under the 18% and 12% tax slabs will be moved to a lower 5% slab. This adjustment is part of a broader strategy to alleviate the tax burden on consumers and encourage spending. The government believes that these changes will foster a more conducive environment for economic activity across the country.