Overview

• The Finance Ministry’s August 17 plan would collapse four existing GST slabs into 5% and 18% rates, introducing a 40% special levy on sin and luxury goods.
• About 99% of items currently taxed at 12% are earmarked for the 5% slab, while roughly 90% of goods in the 28% bracket would move to 18%.
• The COVID-era compensation cess is set to lapse in November, ending a key mechanism that protected state revenues.
• Analysts estimate the annual revenue shortfall at ₹1–1.1 lakh crore (0.3–0.5% of GDP), which the government says will be neutralised by stronger consumption and one-off fiscal buffers.
• The fitment committee’s draft goes before the GoM on August 20–21, with the GST Council slated to decide in September or October for a Diwali rollout.