The 56th meeting of the GST Council has approved a two-level (5% and 18%) tax structure, removing the old four-level tax system (5%, 12%, 18%, 28%). Apart from this, a special tax rate of 40% has been implemented on some luxury goods and services.
Now that festivals like Navratri and Diwali are near, and GST has been reduced, it will be interesting to see whether sales in the small car and two-wheeler segment increase again or not.
The industry had high expectations regarding mobile phones in the meeting, but the GST Council did not reduce the tax rate on smartphones.
PM Modi announced sweeping GST reforms from Red Fort, including simpler returns, lower rates on essentials, and tax simplification. Aimed at easing business, curbing inflation, and boosting economy, these changes promise relief for common citizens and traders alike by Diwali 2025.
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