The Goods and Services Tax (GST) Council will hold its 56th meeting on September 3 and 4, 2025, in New Delhi. The meeting will begin at 11 a.m. on both days, according to an official communication issued to members.
Ahead of the Council meeting, an officers’ meeting is scheduled for September 2, also in New Delhi. The agenda for both meetings, along with details of the venue, will be shared with members subsequently, the communication said. All members of the GST Council have been invited to participate in the deliberations.
The Council, which comprises finance ministers of all states and Union Territories along with the Centre, is expected to deliberate on recommendations by the three Groups of Ministers (GoMs) on rate rationalisation, compensation cess and health and life insurance.
According to officials, the GoM on rate rationalisation met earlier this week and agreed in principle to the Centre’s proposal for a two-slab GST.
Under the proposed reform, the GST structure would be simplified to two rates of 5 per cent and 18 per cent, categorising goods and services as ‘merit’ and ‘standard’. A special rate of 40 per cent would apply to select items such as ultra-luxury cars and sin goods.
At present, GST is levied under a four-tier structure of 5, 12, 18 and 28 per cent. The plan for next-generation reforms includes scrapping the 12 per cent and 28 per cent slabs, phasing out the compensation cess, and correcting inverted duty structures. Officials said these changes are aimed at boosting consumption and providing relief to small businesses.
The apex decision-making body for indirect tax will also consider exempting life insurance products for individuals, according to the office memorandum sent to states and Union Territories. A meeting of officers from both states and the Centre on September 2 will precede the Council’s deliberations.
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On Friday, ET reported that the 56th GST Council is being held in the first week of September to ensure the reforms are implemented in time for Diwali. A day earlier, the GoM on rate rationalisation unanimously backed the Centre’s proposal for the new two-slab structure.
The ministers also agreed to continue discussions on any possible revenue loss for states and mechanisms to compensate them, other than through the compensation cess on sin goods.
Once cleared by the Council, the reforms may be rolled out ahead of the festive season. Prime Minister Narendra Modi, in his Independence Day address, described the proposed GST reform as a “Diwali gift” for the people.
Experts have welcomed the move, saying it could ease prices, encourage spending and drive economic growth amid global uncertainty. However, they cautioned about an immediate revenue loss estimated at ₹45,000 crore for the current financial year.
“The proposed shift of most items from the 12 per cent slab to 5 per cent and from the 28 per cent slab to 18 per cent promises tangible relief for households and MSMEs while aligning with the government’s broader agenda of growth and financial inclusion,” said Manoj Mishra, partner and tax controversy management leader at Grant Thornton Bharat LLP.
“At the same time, careful calibration will be essential to preserve revenue neutrality and avoid inflationary pressures,” he added.
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