Overview

• Fitment proposals reported this week point to moving many 12% food items such as butter, condensed milk, jams, mushrooms, dates, nuts and namkeens to 5%, with chocolates containing cocoa, cereal flakes, pastries and ice cream suggested to drop from 18% to 5%.
• Textiles and fertilisers are flagged for major relief, with woven fabrics, apparel and key inputs like urea, DAP, MOP and SSP proposed at 5% to fix inverted duty structures, and reports indicate the Council will also consider widening the nil-rate basket for select foods and school supplies.
• For autos, a cut under consideration would shift small cars and two-wheelers from 28% to 18%; industry leaders including Maruti Suzuki’s R. C. Bhargava welcomed lower rates even as he noted buyers should await official word and many are postponing purchases until the festive season.
• Analysts estimate the rationalisation could trim annual GST collections by about ₹1.66 lakh crore, heightening the need for state consent when the GST Council meets in New Delhi on September 3–4.
• With U.S. tariffs of up to 50% on Indian goods now in force since August 27, banks and research firms say GST 2.0 could help support consumption, and the CBIC has cautioned media and markets to avoid speculation ahead of the Council’s decisions.