GST rate cut decision pending as GoM report delayed
The much-anticipated GST rate cut is still in limbo. This has left many businesses and consumers wondering what to expect and when.
Let’s decode the current status and its implications for Indian taxpayers.
What is the GoM report on GST rate cuts?
- Its mandate: simplify the rate structure and reduce classification disputes.
- Key focus areas:
- Merging 12% and 18% slabs
- Reducing exemptions
- Increasing revenue neutrality
Finance Ministry’s official stance
On July 20, 2025, the Ministry of Finance clarified:
“No proposal on GST rate reduction has been placed before the GST Council so far as the GoM has not submitted its final report.”
(Source: pib.gov.in)
So, all social media chatter or speculative news about rate cuts is premature and not backed by government action.
What does this mean for businesses?
Until the GoM finalises its report and the Council takes it up:
- Current GST rates continue without change.
- Businesses should not alter pricing based on unverified news.
- Contracts, invoices, and tax planning must be based on existing slabs.
Expert View (CA Insight):
“It’s risky to anticipate GST rate changes without an official notification. Businesses must stick to current rates until the Council approves and notifies any changes.”
GST rate structure: Current vs Proposed (Expected)
| Slab | Current Rate | Possible Change (GoM Suggestion) |
|---|---|---|
| 5% | Retain | Likely unchanged |
| 12% | Existing | May merge with 18% |
| 18% | Existing | May merge with 12% |
| 28% | Existing | Likely to stay (for sin/luxury goods) |
Note: These are only working suggestions. Final call rests with the GST Council.
Legal angle: When do GST rates officially change?
- By GST Council recommendation, and
- Through notification by the Central Government (under CGST/IGST Acts)
Why this delay?
- GoM’s task is politically and economically sensitive.
- Needs consensus across states (which may lose revenue).
- Requires revenue impact assessment by CBIC and GSTN.
Practical tips for taxpayers
- Don’t rely on assumptions. Wait for official circulars or notifications.
- Use trusted tax platforms (like Efiletax) to stay updated on rate changes.
- For advance planning or tenders, mention “applicable GST at the time of supply” to avoid disputes.
When to expect the final GoM report?
While no date has been confirmed, reports suggest that the GoM may submit its findings before the next GST Council meeting (likely in Q3 FY 2025–26).
Summary
No GST rate cut has been finalised as the Group of Ministers (GoM) report is still pending, confirmed the Finance Ministry. Taxpayers must follow existing rates until official notifications are issued.
FAQs
Q1. Is GST rate being reduced in 2025?
No, as of now, no reduction has been approved.
Q2. Can I price my product assuming a lower GST?
No. Only current GST rates apply unless notified otherwise.
Q3. Where can I check official GST rate updates?
On the CBIC website or Efiletax blog for simplified updates.
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