PM Modi welcomes GST council’s approval of rate cuts, says changes will benefit every section of society

Prime Minister Narendra Modi announced on Wednesday that the GST Council has approved the Union Government’s proposal for major rate changes and process reforms under the Goods and Services Tax (GST) system.

Referring to his Independence Day speech, PM Modi said the government had promised to bring in next-generation GST reforms. He explained that a detailed plan was prepared to simplify tax rates and processes, with the aim of making life easier for ordinary people and strengthening the economy.

“I am glad that the GST Council, which includes both the Union and State governments, has agreed to these reforms. They will benefit the common man, farmers, MSMEs, middle-class families, women, and youth,” the Prime Minister said.

He added that these wide-ranging reforms will not only improve daily life but also make it easier to do business across India.

Big Simplification in GST Slabs

In a significant reform, Finance Minister Nirmala Sitharaman announced the merger of the 12% and 18% GST slabs into a dual-rate structure of 5% and 18%, with a higher 40% rate reserved for sin goods such as tobacco and luxury products.

She said the simplification is part of the “Next-Generation GST” initiative, designed to boost affordability, encourage consumption, and make the system more efficient.

Also Read: GST Council slashes tax slabs to two to spur consumption; announces key measures for middle class

Relief for Daily-Use Items

“This reform is not just about rate cuts, it’s also about structural changes,” Sitharaman said at a press briefing. “Everyday items used by the common man and middle class have seen a complete review, and in most cases, the GST rates have come down sharply.”

Products such as soaps, shampoos, toothpaste, bicycles, kitchenware, food items like noodles, chocolates, coffee, butter, and ghee have all moved to the 5% slab, while essentials like milk, paneer, chena, and all Indian breads such as roti and paratha have been moved to the 0% category.

Support for Key Sectors

Sitharaman highlighted that labour-intensive industries, farmers, and the agriculture and health sectors will also benefit from the reforms. “We have corrected inverted duty structures, resolved classification issues, and created more predictability and stability in GST. Refunds, return filing, and registration are being simplified to make compliance easier,” she added.

The government stressed that these reforms are designed not only to reduce the cost of living for households but also to empower businesses and strengthen economic growth.