Overview

• The Group of Ministers endorsed moving from four GST slabs to two rates of 5% and 18%, eliminating the 12% and 28% brackets for most goods and services.
• Under the Centre’s fitment plan, about 99% of items now at 12% would shift to 5% and roughly 90% of those at 28% would move to 18%.
• A special 40% levy is proposed for a narrow set of 5–7 demerit or ultra-luxury goods, such as tobacco products and high-end automobiles.
• The GoM on insurance recommended exempting individual health and life insurance premiums from GST, with states seeking safeguards to ensure benefits reach policyholders and experts warning about Input Tax Credit constraints.
• States pressed for clarity on revenue loss and compensation, as estimates include an annual hit of about ₹85,000 crore from rate rationalisation and roughly ₹9,700 crore from the insurance exemption.