GST Rate Reductions Effect from September 22
Finance Minister Nirmala Sitharaman announced that recent GST rate cuts will take effect from 22 September 2025. These cuts are expected to streamline tax slabs and reduce rates across many consumer goods.
Economic Impact Projected
The government estimates these reforms will inject about ₹2 lakh crore into the Indian economy by increasing cash in the hands of consumers, boosting demand and improving liquidity.
Simplified Tax Structure
Under the reform, the GST system is simplified to two main slabs — 5% and 18% — with a higher 40% rate retained for luxury and sin goods. Slabs of 12% and 28% are being eliminated.
Winners & Revenue Losses
Everyday items such as toiletries, small appliances, and food products will benefit from lower rates, making them more affordable. However, there is a projected revenue loss for governments amounting to around ₹48,000 crore in the short term.
