From September 22, 2025, India will see a significant Goods and Services Tax (GST) overhaul, shifting from a four-slab system to a simplified two-slab structure. The new rates will be 5% for common-use items and 18% for all other goods and services, eliminating the previous 12% and 28% slabs. This reform aims to both simplify tax compliance for businesses and reduce costs for consumers.
Key Changes and Consumer Impact
The Central Board of Indirect Taxes and Customs (CBIC) is closely monitoring the market to ensure that businesses pass on the benefits of the tax cuts to consumers. CBIC chairman Sanjay Kumar Agarwal has expressed confidence that competitive pressures will lead to price reductions. Past rate cuts in 2017, 2018, and 2019 showed that the majority of businesses complied, with very few formal complaints filed.
Anti-Profiteering Provisions
To protect consumers, the GST law includes an anti-profiteering authority. This body allows consumers to file complaints if businesses do not lower prices after a tax cut. While 704 complaints were registered since 2017, the low number suggests that benefits were largely passed on. The government has announced that the deadline for new complaints will be March 31, 2025, indicating that the system is considered stable.