New two-tier GST structure to kick in from September 22: Nirmala Sitharaman

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Updated on: Sept 03, 2025 10:19 pm IST

The GST Council has approved a two-tier structure of 5% and 18%, as well as 40% to come into effect from 22 September.

India has decided to cut taxes on hundreds of consumer items ranging from soaps to small cars to spur domestic demand in the face of economic headwinds from U.S. tariffs, two state ministers told reporters on Wednesday.

New Delhi, Sep 03 (ANI): Union Finance Minister Nirmala Sitharaman greets during the 56th meeting of the GST Council, in New Delhi on Wednesday. Several CM's of states attends the meeting. (ANI Photo/ Jitendar Gupta)(Jitender Gupta) — New Delhi, Sep 03 (ANI): Union Finance Minister Nirmala Sitharaman greets during the 56th meeting of the GST Council, in New Delhi on Wednesday. Several CM’s of states attends the meeting. (ANI Photo/ Jitendar Gupta)(Jitender Gupta)

The new goods and services tax (GST), which will become effective from September 22, will lead to an estimated revenue loss of 477 billion rupees, West Bengal minister Chandrima Bhattacharya said after the GST council meeting.

The GST Council on Wednesday approved a two-tier rate structure of 5 and 18 per cent, which will be implemented from September 22.

Bihar Deputy Chief Minister Samrat Choudhary said that all states were on board for the rate rationalisation, and it was a consensus-based decision.

West Bengal Finance Minister Chandrima Bhattacharya said the total loss due to GST rate rationalisation would be ₹47,700 crore.

Uttar Pradesh Finance Minister Suresh Khanna said no decision has been taken on the tax incidence on demerit goods, and imposing a levy over and above the 40 per cent would be decided later.

The marathon 56th meeting of the GST Council lasted for 10.5 hours, in which the Centre and states thrashed out key tax proposals.