NEW DELHI: The GST Council is likely to move towards a simpler tax structure with fewer and lower rates, as the review process is nearly complete, Finance Minister Nirmala Sitharaman said on Tuesday.
Currently, Goods and Services Tax (GST) follows a four-tier structure with slabs of 5, 12, 18, and 28 per cent. While essential goods are taxed at the lowest 5 per cent, luxury and demerit items fall under the highest 28 per cent slab.
A group of ministers (GoM) has been reviewing the structure to propose rate revisions and slab reductions.
“To be fair to the GST and the ministers in the council, the work on rationalising and simplifying GST rates began nearly three years ago. The scope was later widened, and now the review is almost complete,” Sitharaman said at the India Today-Business Today Post Budget Round Table.
Council decision soon
She emphasised that the ministers were given time for a deeper evaluation, as tax rates impact everyday items. “For me, it was also important that we don’t lose the opportunity to reduce the number of rates, which was always the original intent. I hope the GST Council will take a decision soon,” she added.
Days after presenting the Union Budget 2025-26, which provided significant income tax relief for the middle class, Sitharaman reiterated that India’s economic fundamentals remain strong and dismissed concerns about a structural slowdown.
She also clarified that there is no proposal to phase out the old tax regime. Addressing concerns about capital expenditure, Sitharaman said the allocation has increased to Rs11.21 lakh crore, accounting for 4.3 per cent of GDP.
The Budget for FY26 has set a fiscal deficit target of 4.4 per cent of GDP, lowering the FY25 estimate by 10 basis points to 4.8 per cent.
