PM Modi Announces Next-Gen GST Reforms Ahead of Diwali

Prime Minister Narendra Modi, in his Independence Day 2025 address, announced that the government is preparing to roll out next-generation GST reforms by Diwali, calling it a "Diwali gift" to citizens. The proposed reforms aim to simplify the tax structure, reduce burdens on consumers, and boost the economy. Key proposals include: Reducing GST slabs to just two main rates: 5% for most daily-use goods and 18% for standard items, eliminating the current 12% and 28% slabs. 90% of items in the 28% slab to move to 18%, and 99% from the 12% slab to shift to 5%. A special 40% rate for luxury and sin goods (e.g., tobacco). Petroleum products will remain outside GST. The reforms rest on three pillars: structural reforms, rate rationalisation, and ease of living. They aim to correct inverted duty structures, resolve classification disputes, ensure policy stability, and enhance affordability—especially for the common man and MSMEs. The Centre has shared the proposals with the GST Council’s Group of Ministers. With the end of the compensation cess, fiscal space has opened for long-term rate alignment. The goal is to make GST simpler, more transparent, and stable, supporting Atmanirbhar Bharat and inclusive growth while strengthening the formal economy and improving ease of doing business. Final implementation will require consensus with states, but the government aims to roll out changes within the current financial year. looks like White Goods and many other things will be cheaper like Health Insurances etc.