The central government is considering a major restructuring of Goods and Services Tax (GST) rates that could significantly ease the financial burden on middle- and lower-income households. At the heart of the discussion is the possible elimination of the 12% GST slab, which currently applies to many daily-use goods. These products may either be moved to the 5% tax bracket or benefit from a reworked rate structure, according to sources familiar with the matter.

A senior official indicated that shifting these goods to the 5% category would provide tangible relief to average Indian families grappling with inflation and high living costs. The proposal is likely to be taken up in the upcoming 56th meeting of the GST Council, expected later this month. The required 15-day notice for the meeting is already in motion, suggesting that discussions are at an advanced stage.

This move would not only simplify India’s GST architecture but also send a strong message about the government’s commitment to tackling inflation. Long-term plans may involve compressing the current multi-slab system into a three-tier structure with rates like 8%, 16%, and 24%, or 9%, 18%, and 27%. While final approval will depend on GST Council consensus, the Centre appears poised to act decisively.

The government is weighing a significant revamp of the Goods and Services Tax (GST) structure, with the 12% slab—applicable to many essential consumer goods—potentially set for elimination. The proposed overhaul is aimed at reducing the tax burden on middle- and lower-income households, many of whom rely on daily-use goods currently taxed at 12%. These items may soon be reclassified under the 5% slab or benefit from a new, simplified structure.

Officials suggest the restructuring could come up for discussion during the 56th GST Council meeting later this month. As per rules, a 15-day notice is mandatory for convening the meeting, and preparations are already underway, hinting at the urgency behind the move. Sources say the Centre is pushing for the change both as a step toward tax rationalization and as a response to mounting public concerns over inflation and cost of living.

If implemented, the change would mark a major step in simplifying India’s complex GST regime. The broader long-term plan includes shifting to a three-rate system—either 8%-16%-24% or 9%-18%-27%—making the tax framework more predictable and efficient. However, the final decision will rest on consensus within the GST Council, which includes both the Centre and state governments.