Government may slash 12% GST slab on essential goods ahead of key council meeting

In a move that could bring major relief to middle- and lower-income groups, the central government is weighing a proposal to overhaul the current Goods and Services Tax (GST) structure. According to sources, a key recommendation under review involves reducing GST on several essential goods from 12% to 5%, or scrapping the 12% slab entirely.

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Most products in the 12% category are everyday essentials, frequently purchased by middle-class families and economically weaker sections. Reclassifying these goods into the 5% slab could lower retail prices and ease the financial burden on consumers, especially at a time when inflation continues to pinch household budgets.

Alternatively, the government may eliminate the 12% category altogether, redistributing the affected items into the existing 5% or 18% brackets. The idea is under serious discussion ahead of the 56th GST Council meeting, which is likely to be scheduled later this month, sources added. A minimum 15-day notice is mandatory before the Council convenes.

Chaired by the Union Finance Minister and comprising state finance ministers, the GST Council holds the power to revise tax rates. If approved, the revision would represent one of the most significant GST reforms since its 2017 launch, and could have notable political and economic implications ahead of the upcoming elections.