Overview

• The Prime Minister’s Office has given in‐principle approval for the first major overhaul of the eight‐year-old GST framework.
• Officials report about 90% agreement to scrap the 12% rate slab and move affected items into existing 5% or 18% brackets with input tax credits intact.
• High-level political consultations are underway to address state revenue concerns before the GST Council convenes in late August.
• The compensation cess schedule to expire on March 31, 2026, is expected to be replaced by dedicated health and clean energy cesses.
• Analysts forecast that lower rates on tractors, air conditioners and term insurance could spur demand and improve consumer affordability.