Overview

• The proposal shifts GST to 5% and 18% slabs with a 40% rate for select sin and luxury goods after a GoM backed scrapping the 12% and 28% tiers.
• Government estimates point to a roughly Rs 40,000 crore revenue shortfall from the rejig, with an additional hit of about Rs 20,000 crore from recent changes affecting online gaming.
• Officials aim to notify new rates within five to seven days of the Council’s vote, with implementation indicated around September 22 to align with Navratri if states agree.
• Finance Ministry sources contend the revenue impact would be temporary, citing consumption support and potential offsets from the high sin rate.
• A proposal to exempt individual health and life insurance premiums from GST is on the table, though some states have differed on this relief.