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3h ago

GST Council Sets Sept. 3–4 Meeting to Weigh Two‑Slab GST Overhaul and 40% Special Rate

States seek revenue safeguards ahead of a decision on the overhaul.

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The Union finance minister is the chairperson of the GST Council, where states/UTs are represented by finance ministers.
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Overview

  • The 56th Council session will be held in New Delhi on September 3–4 with an officers’ meeting on September 2 to prepare the agenda, including rate rationalisation and insurance.
  • The GoM on rate rationalisation has endorsed moving to two slabs of 5% and 18% by scrapping the 12% and 28% rates, with its recommendations to be placed before the Council.
  • The Centre’s plan includes a 40% special rate for a short list of sin and ultra‑luxury items as the compensation cess is phased out, while several states are pressing for additional levies or compensation to protect revenue.
  • If approved, many items now at 28% could shift to 18% and small cars may move lower, with high‑end cars and SUVs in the 40% category; analyst estimates suggest car prices and EMIs would fall under the new rates.
  • A GoM has also backed making GST nil for individual life and health insurance premiums, with ministers seeking clarity on input tax credits and safeguards to ensure benefits reach consumers.