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GST reforms
Photo Courtesy: PIB

PM Modi hails next-gen GST reforms as Council approves two-tier tax structure ahead of festive season

| @indiablooms | Sep 04, 2025, at 12:45 am

New Delhi: Prime Minister Narendra Modi on Wednesday welcomed the introduction of next-generation reforms in the Goods and Services Tax (GST), describing them as steps that would ease the lives of citizens and make business simpler, particularly for small traders and enterprises.

"During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST. The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy," Modi said.

Finance minister Nirmala Sitharaman announced sweeping rate cuts after the GST Council approved a new two-slab structure of 5% and 18%.

The reforms, set to take effect from September 22, are expected to significantly lower household expenses.

"For common man and middle class items, there is a complete reduction from 18% and 12 to 5%. Items such as hair oil, toilet, soap bars, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware and other household articles are now at 5%," Sitharaman said.

"UHT milk, paneer, all the Indian breads will see nil rate," she added.

The decisions were taken at the 56th GST Council meeting held on Wednesday, which reviewed rate revisions and category adjustments across a wide range of products under the indirect tax system.

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