Overview

• The Centre’s plan proposes two main GST slabs of 5% and 18%, with a special ~40% rate for a narrow set of sin and ultra‑luxury goods, replacing the 12% and 28% slabs.
• Government and media reports indicate implementation could begin by mid- to late September, with some pointing to around Sept. 20–22 and notifications expected within a week of Council approval.
• Finance Ministry and Fitment Committee assessments flag a potential Rs 40,000 crore shortfall from rationalisation, with separate curbs on online gaming seen reducing GST/TDS receipts by about Rs 20,000 crore.
• Private estimates vary widely on annual revenue impact, ranging from roughly Rs 60,000–85,000 crore to Nomura’s Rs 1.5 lakh crore, sharpening the debate over safeguards for states as the compensation cess winds down in 2026.
• Items under discussion include moving all food and textiles to the 5% slab, cutting cement to 18%, exempting individual health and life insurance premiums, and possible relief for some services like salons, while auto dealers urge early rollout as consumers defer purchases.