The Government of India, following the recommendations of the 56th GST Council meeting on September 3, 2025, has rationalized and reduced GST rates on multiple goods and services—cutting rates from 28% to 18%, 18% to 12% or 5%, and 12% to 5% or Nil. This reduction stems from the recommendations of two Groups of Ministers (GoMs): one on Rate Rationalisation, constituted in 2021, aimed at simplifying GST slabs, correcting inverted duty structures, reducing classification disputes, and enhancing revenue; and another on Life and Health Insurance, formed in 2024, to assess GST on insurance products.
The Government of India, following the recommendations of the 56th GST Council meeting on September 3, 2025, has rationalized and reduced GST rates on multiple goods and services—cutting rates from 28% to 18%, 18% to 12% or 5%, and 12% to 5% or Nil. This reduction stems from the recommendations of two Groups of Ministers (GoMs): one on Rate Rationalisation, constituted in 2021, aimed at simplifying GST slabs, correcting inverted duty structures, reducing classification disputes, and enhancing revenue; and another on Life and Health Insurance, formed in 2024, to assess GST on insurance products. Both GoMs' reports were reviewed by the GST Council, which emphasized a multi-sectoral, citizen-centric approach to improve affordability, support small businesses, and enhance ease of doing business. The rate rationalization also reflects consultations with stakeholders, surveys, and policy assessments, ensuring the reforms are balanced to increase compliance and benefit both consumers and traders while maintaining revenue integrity.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO. 1374
TO BE ANSWERED ON MONDAY, DECEMBER 08, 2025/AGRAHAYANA 17, 1947 (SAKA)
IMPACT OF GST REDUCTION
- SMT. SAJDA AHMED:
Will the Minister of FINANCE be pleased to state:
a. whether the Government has recently reduced Goods and Services Tax (GST) rates on several items, if so, the details thereof;
b. the reasons for the reduction in GST rates;
c. whether any survey/study or consultation has been conducted with stakeholders before such rate reduction, if so, the details thereof; and
d. whether the Government has assessed the possible impact of the rate reduction, if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) Yes, based on the recommendations of the 56th GST Council meeting held on 03.09.2025, the Government has rationalized GST rates on many goods and services and reduced GST rates from 28% to 18%, 18% to 12/5%, 12% to 5%/Nil.
(b), (c) and (d) Based on the recommendations of the GST Council in its 45th Meeting held on 17th September 2021, a Group of Ministers (GoM) on Rate Rationalisation was constituted to undertake GST rate rationalization, correction of inverted duty structure with an objective to simplify the rate structure, to reduce classification related disputes and enhance GST revenue.
Further, based on the recommendations of the 54th GST Council meeting held on 09.09.2024, Group of Ministers (GoM) on Life and
Health Insurance was constituted on 15.09.2024 to examine and review the present tax structure of GST on life and medical insurance.
The reports of both these GoMs were presented before the GST Council in its 56th meeting held on 03.09.2025. The GST Council recommended reduction in GST rates with a multi-sectoral and multi-thematic focus on improving the lives of all citizens and ensuring ease of doing business for all, including small traders and businessmen.