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GST Rate Cuts Announced by FM Sitharaman: 5% and 18% to Be Two Main Slabs; New Rates Effective September 22

GST Rate Cuts Announced by FM Sitharaman: 5% and 18% to Be Two Main Slabs; New Rates Effective September 22

Last Updated Sep - 04 - 2025, 10:37 AM | Source : Fela News

Finance Minister simplifies GST with two main slabs 5% and 18% from September 22, easing tax burden.
GST Rate Cuts Announced by FM Sitharaman
GST Rate Cuts Announced by FM Sitharaman

Finance Minister Nirmala Sitharaman has introduced a welcome change in India's GST structure. He has announced a simplified two-level structure of 5% and 18%, which will be effective from 22 September 2025. This step is not only the purpose of simplifying tax compliance for businesses, but also towards lightening the daily financial burden of citizens and consumers.

Under this new system, the complex, four-slab structure comprising 5 %, 12 %, 18 %, and 28 % will be replaced by just two, making it much clearer and friendlier for the average taxpayer. The shift comes as a strategic effort to stimulate economic activity through easier taxation and improved clarity.

For ordinary people this means that GST will be cut on many essential commodities and household items. Everyday essential items such as food, medicines and personal care products will now be taxed at only 5%, while earlier there were higher rates on them. Businesses, especially small and medium -sized enterprises, are expected to benefit easily in formalities and operations.

This improvement is timely; Lower rates are ready to promote consumer expenses due to festive weather close, especially on goods such as small cars, electronics and home appliances. The anticipated result? A smoother, more affordable festive shopping experience and a burst of economic activity.

In short, this change is more than just rearranging percentages on paper. It’s an economic lifeline bringing clarity, reduction of compliance headaches, and most importantly, relief in the pocket of every Indian. With the new GST rates kicking in from late September, consumers and businesses alike can breathe a bit easier.

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