GST Council Approves Dual Tax Rate Structure of 5% and 18%
Date: September 3, 2025
Source: pb.jobsoftoday.in
Big GST Reform Announced
The 56th GST Council Meeting, chaired by Union Finance Minister Nirmala Sitharaman, has approved a major reform in the indirect tax regime. The Council has decided to adopt a dual tax rate structure of 5% and 18%, removing the slabs of 12% and 28%.Council approved a new Slab of 40 per cent for Sin and luxury Goods.
New GST Rates Effective from September 22, 2025
The new GST rates will be applicable from September 22, 2025. With this change, only two GST slabs will remain – 5% and 18%, making the tax structure simpler and easier for businesses and consumers.
Key Highlights of the GST Council Decision
- ✅ Dual GST Rate System – Only 5% and 18% slabs to continue.
- ✅ 12% and 28% slabs removed to simplify the GST structure.
- ✅ Health and Life Insurance exempted from GST – a big relief for citizens.
- ✅ Implementation Date – Effective from 22 September 2025.
Impact of the New GST Structure
The removal of the 28% slab is a significant move as it was often criticized for being too high. Experts believe the dual GST structure will help in:
- ✔ Reducing tax disputes
- ✔ Simplifying compliance for businesses
- ✔ Lowering the burden on consumers
- ✔ Making GST more citizen-friendly
Finance Minister’s Role
Union Finance Minister Nirmala Sitharaman chaired the Council meeting held on September 3-4, 2025. State finance ministers were also present, and a consensus was reached on simplifying the GST structure.
Conclusion
The new GST rates of 5% and 18% will mark a new era of simplified taxation in India. The exemption of health and life insurance from GST is expected to provide major relief to the middle class and increase affordability of essential financial services.
FAQs on New GST Rates
Q1. What are the new GST rates in India from September 2025?
The GST Council has approved only two slabs – 5% and 18%.
Q2. Which GST slabs have been removed?
The 12% and 28% GST slabs have been removed.
Q3. From when will the new GST rates apply?
The new GST rates will be applicable from September 22, 2025.
Q4. Is GST applicable on health and life insurance now?
No, the GST Council has exempted health and life insurance from GST.
Q5. Who chaired the 56th GST Council Meeting?
Union Finance Minister Nirmala Sitharaman chaired the meeting along with state finance ministers.
