All food, textile products may be moved to 5% GST bracket: Report

The Goods and Services Tax (GST) Council will reportedly discuss a proposal to move all food and textile products into the 5 per cent stab when it meets early next month. The council could also discuss a plan to cut GST on a host of items including cement, as well as mass consumption services such as salon and beauty parlours. The government is aiming to simplify the tax regime and end all classification concerns.

According to a report in Times of India, the GST on cement is proposed to be slashed from 28 per cent to 18 per cent. This has been a long-standing demand of the construction and infrastructure sectors, as well as expected to reduce costs for end customers.

The government is also evaluating the GST rates on some of the commonly used services to see if they could be reduced to the 5 per cent bracket from the 18 per cent bracket. Small salons are exempt from this rate, but mid- and higher-end salons face 18 per cent GST that they pass on to customers.

GST for term assurance and health insurance policies purchased by individuals would be zero in an attempt to increase penetration of the service. Also small cars, with length up to 4 metres, will face 18 per cent GST and bigger ones 40 per cent GST.

The 56th meeting of the GST Council, headed by Finance Minister Nirmala Sitharaman will be held on September 3 and 4, 2025, in New Delhi. The sessions will start at 11 am. on both days. Ahead of the Council meeting, an Officers’ Meeting is scheduled for September 2, 2025, also in the national capital.

The detailed agenda and venue are yet to be announced. Government sources said the Centre aims to implement GST rate cuts before the Dusshera-Diwali festival season. Diwali will be observed on October 21 this year. This move could provide relief to consumers and businesses ahead of the festive demand period.

In its meeting on August 21, the Group of Ministers (GoM) on rate rationalisation decided to forward the Centre’s proposal for a dual GST rate structure to the GST Council. The proposal includes two GST rates of 5 per cent and 18 per cent, replacing the existing 12 per cent and 28 per cent slabs.