Possible GST Relief Coming for Middle-Class Families

Reports suggest that the government is planning to lower the GST rates for commonly used household items. The Goods and Services Tax (GST) slabs may soon be revamped and rationalized to provide relief to the middle class. Official sources indicate that the government is considering reducing the GST rates for everyday household items.

The current GST structure consists of four main tax brackets - 5%, 12%, 18%, and 28%, with additional rates for specific items like precious metals and extra cess on sin goods. The 5% category covers 21% of GST items, the 12% bracket includes 19%, the 18% applies to 44%, and the highest rate of 28% is for 3% of items.

This potential step follows the recent changes in the income tax regime announced in the budget by FM Nirmala Sitharaman. Under the new income tax slabs, individuals earning up to Rs 12 lakh taxable income will pay zero tax from the financial year 2025-26.

The revised GST tax slabs may include items such as pulses, rice, besan, toothpaste, kitchen utensils, footwear, and certain price range ready-made garments. There are discussions about removing, reducing, or shifting items from the 12% GST tax slab to the 5% bracket.

Recent reports suggest that the government is deliberating on overhauling the GST framework to simplify it and modify the existing rate categories. High-level consultations are focusing on streamlining the taxation system and enhancing operational efficiency.

Government data released revealed that gross GST collections hit a record high of Rs 22.08 lakh crore in fiscal year 2024-25, showing a significant increase from the previous years. The monthly collection average also saw substantial growth over the years.