New Delhi: For the first time since its rollout in 2017, India’s Goods and Services Tax (GST) system is set for a major makeover — and there could be good news for consumers.

According to reports, the Prime Minister’s Office (PMO) has given an in-principle nod to a significant restructuring of GST rates. The proposal will be formally discussed by the GST Council — the apex body for indirect taxes — when it meets after the monsoon session of Parliament, likely in August.

What could change?

Currently, GST has five main tax slabs: nil, 5%, 12%, 18%, and 28%, in addition to special rates of 0.25% and 3% for precious metals. Of these, 44% of goods fall under the 18% slab, while 21% are in the 5% category and 19% in the 12% slab.

Under the proposed revamp, the government is considering scrapping the 12% slab altogether and moving many of these items to the lower 5% slab. Some goods, however, may fall into the 18% category. The move aims to simplify the structure and make products more affordable for consumers.

Luxury items, such as automobiles and cigarettes, which currently fall under the highest 28% slab along with an additional compensation cess, are likely to remain unchanged.

Why now?

Officials say the timing is right, as the GST system has stabilised over the years and key economic indicators are strong. With new free trade agreements on the horizon, the government wants to ensure that domestic businesses are not weighed down by a complex tax structure.

What’s next?

The finance ministry is expected to start talks with state governments to build political consensus for these reforms. Internal discussions are already underway, sources say.

Alongside GST, the government is also planning to table a new Income Tax Bill in the upcoming monsoon session, signaling a broader tax overhaul.

While industry bodies and MPs have long demanded GST rate rationalisation, progress had been slow until now. But experts believe that a simpler, more streamlined GST system could help boost economic growth and benefit both consumers and businesses.

So, shoppers may have something to look forward to — potentially lower prices on everyday items if the revamp goes through.