Here’s what a GST shake-up might mean for your cart
Business
Utpal Siddhartha
29 AUG 2025 | 13:26:20
The GST Council, the constitutional body responsible for managing the Goods and Services Tax (GST) in India, is set to meet for the 56th time on September 2-3 in Delhi.
This meeting is expected to be one of the most crucial gatherings of the council chaired by Finance Minister Nirmala Sitharaman. For the first time since its inception, the council is set to take the overhaul of the GST rate structure.
As per reports, with this overhaul, tax rates are likely to be lowered on a wide range of products. Though, some items may also see an increase.
So, what’s going to become cheaper and what could get costlier? We have prepared a list of key items that impact most of us, based on the reports regarding these proposals. First up, garments. Till now garments priced up to ₹1,000 attracted 5% GST. Anything above that would attract 12% tax. But now, the Group of Ministers (GoM) on rate rationalisation has reportedly recommended to increase the threshold of 5% for articles priced up to ₹2,500.
And it’s not limited to apparel only. Reports say the same change is proposed for footwear also.
Relief on stationery, food bills
Also, if you are a student or a parent of a student, you could save a lot on stationery. That’s because GST on items such as pencils, erasers and sharpeners is likely to be waived off.
We could see a huge relief on our monthly food bills, with tax cuts proposed across staples ranging from butter and ghee to tender coconut water, to name just a few items.
Items that may get costlier
However, a few things may also get expensive. In fact, apparel and footwear priced above ₹2,500 could see a higher tax rate of 18%. According to reports, a similar hike is likely for business class and premium air travel.
Then there are some goods which may be moved to the 40% tax bracket. Carbonated drinks, or to simply put it colas, could be one of the products to attract ‘sin’ tax.
GST Council to take the call
Now, all of these are currently in the proposal stage. The final call is likely to be taken by the GST Council when it meets to discuss the proposed changes. Meanwhile, the Central Board of Indirect Taxes & Customs (CBIC), which is responsible for administering Indirect Taxes in India, has cautioned people against falling for speculation.
In a social media post on its official handle, CBIC wrote that decisions on GST rates are taken collectively by the GST Council which comprises the Centre and States. It added that premature speculation gives rise to baseless rumours and may cause volatility in the markets.
PM’s GST message
Earlier this month, while delivering his speech from the Red Fort on the occasion of the 79th Independence Day, Prime Minister Narendra Modi underscored the importance of the next generation GST reforms.
PM Modi also talked about the Central Government’s proposal for significant reforms in GST. He said the changes will focus on 3 pillars, namely structural reforms, rate rationalisation, and ease of living.
PM Modi also highlighted the key areas identified for next-generation reforms included the rationalisation of tax rates to benefit all sections of society, especially the common man, women, students, middle class, and farmers.
This meeting is expected to be one of the most crucial gatherings of the council chaired by Finance Minister Nirmala Sitharaman. For the first time since its inception, the council is set to take the overhaul of the GST rate structure.
As per reports, with this overhaul, tax rates are likely to be lowered on a wide range of products. Though, some items may also see an increase.
GST rate changes proposedThe 56th Meeting of the GST Council will be held on 03rd & 04th September, 2025 at New Delhi
— GST Council (@GST_Council) August 23, 2025
So, what’s going to become cheaper and what could get costlier? We have prepared a list of key items that impact most of us, based on the reports regarding these proposals. First up, garments. Till now garments priced up to ₹1,000 attracted 5% GST. Anything above that would attract 12% tax. But now, the Group of Ministers (GoM) on rate rationalisation has reportedly recommended to increase the threshold of 5% for articles priced up to ₹2,500.
And it’s not limited to apparel only. Reports say the same change is proposed for footwear also.
Relief on stationery, food bills
Also, if you are a student or a parent of a student, you could save a lot on stationery. That’s because GST on items such as pencils, erasers and sharpeners is likely to be waived off.
We could see a huge relief on our monthly food bills, with tax cuts proposed across staples ranging from butter and ghee to tender coconut water, to name just a few items.
Items that may get costlier
However, a few things may also get expensive. In fact, apparel and footwear priced above ₹2,500 could see a higher tax rate of 18%. According to reports, a similar hike is likely for business class and premium air travel.
Then there are some goods which may be moved to the 40% tax bracket. Carbonated drinks, or to simply put it colas, could be one of the products to attract ‘sin’ tax.
GST Council to take the call
Now, all of these are currently in the proposal stage. The final call is likely to be taken by the GST Council when it meets to discuss the proposed changes. Meanwhile, the Central Board of Indirect Taxes & Customs (CBIC), which is responsible for administering Indirect Taxes in India, has cautioned people against falling for speculation.
In a social media post on its official handle, CBIC wrote that decisions on GST rates are taken collectively by the GST Council which comprises the Centre and States. It added that premature speculation gives rise to baseless rumours and may cause volatility in the markets.
It is kindly requested that speculation on GST rates may be avoided.
— CBIC (@cbic_india) August 26, 2025
👉🏻Decisions in this regard are taken collectively by the GST Council which comprises of the Centre and States.
👉🏻Premature speculation gives rise to baseless rumours and may cause volatility in the markets.…
PM’s GST message
Earlier this month, while delivering his speech from the Red Fort on the occasion of the 79th Independence Day, Prime Minister Narendra Modi underscored the importance of the next generation GST reforms.
PM Modi also talked about the Central Government’s proposal for significant reforms in GST. He said the changes will focus on 3 pillars, namely structural reforms, rate rationalisation, and ease of living.
PM Modi also highlighted the key areas identified for next-generation reforms included the rationalisation of tax rates to benefit all sections of society, especially the common man, women, students, middle class, and farmers.
