Overview

• The 56th GST Council meets in New Delhi on September 3–4 after a preparatory officers’ meeting on September 2 to firm up the agenda.
• The Centre’s proposal would collapse the 12% and 28% slabs into 5% and 18% while retaining a high 40% levy for select sin and luxury goods, with 150–175 items under consideration for cuts or exemptions.
• Reports list possible shifts such as everyday foods and school supplies moving to nil or 5%, several FMCG categories dropping from 12% or 18%, and consumer durables like TVs and air conditioners moving from 28% to 18%; zero GST on health and term insurance is also being discussed.
• Opposition-led states forecast annual losses ranging from about Rs 85,000 crore to Rs 2 lakh crore and are pressing for compensation as the cess winds down by March 2026, while SBI projects states remain net gainers and suggests using a roughly Rs 50,000 crore compensation-fund surplus to cushion any hit.
• Markets and analysts flag potential beneficiaries in FMCG, footwear, apparel and autos, though experts caution that price thresholds for garments and footwear (such as a Rs 2,500 split) could reintroduce complexity; August GST collections were Rs 1.86 lakh crore, up 6.5% year on year, as a possible rollout later in September is discussed if approved.