Why in news?
The 56th GST Council meeting took place on 3rd and 4th September 2025 in New Delhi, marking a significant move towards the simplification and modernization of India’s GST structure.
 
Key Highlights

• The Council approved a three-tier GST rate structure (5%, 18%, and a new 40% for demerit goods), eliminating the earlier 12% and 28% slabs. This aims to reduce classification disputes and make compliance more straightforward.
• Rate rationalization measures were taken, notably correcting the inverted duty structure for sectors like fertilizers and textiles.
• Essential goods, such as daily-use items, saw either reduced GST or were merged into lower tax slabs to encourage consumption and provide consumer relief.
• A new 40% GST slab was introduced specifically for luxury and sin goods, including high-end vehicles and tobacco products, to increase revenue from these segments.
• The rollout of automated GST refunds and pre-filled GST returns forms part of new reforms to enhance ease of compliance and transparency.
• The GST Appellate Tribunal (GSTAT) is set for sectoral rollout, resolving long-pending litigation and appeals.
• The measures taken are expected to significantly impact industries such as FMCG, automobiles, construction, healthcare, textiles, and MSMEs.
• Changes are to be implemented from 22nd September 2025 (except for the tobacco rate change).

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