Overview

• Fitment proposals widen the zero-tax list to staples such as UHT milk, pre-packaged paneer, chapati and roti, and move paratha to nil, while shifting items like butter, condensed milk, jams, mushrooms, dates, nuts and namkeens from 12% to 5%.
• A two-slab structure centered on 5% and 18% is under consideration with a special rate near 40% for luxury and sin goods, replacing most of the 12% and 28% tiers.
• Autos could see major changes with GST on small cars and sub-350cc two-wheelers cut to 18% and a roughly 40% rate on larger bikes and premium cars, prompting buyers to delay purchases into the festive season.
• The GoM has recommended ending the compensation cess by Oct. 31, 2025 with any surplus shared equally, and floated options such as integrating cess goods into GST rates or using an additional levy to shield state revenues.
• Analysts peg the annual revenue hit near ₹1.66 lakh crore, CBIC has cautioned against speculative rate lists, and the Council will take final calls on Sept. 3–4 after U.S. duties of up to 50% took effect on Aug. 27.