India plans to simplify GST and lower taxes on common goods by Diwali.
Indian Prime Minister Narendra Modi announced today, 15 August 2025, that the government will introduce “next generation” reforms in the Goods and Services Tax (GST), aimed at reducing taxes on everyday items and supporting small and medium enterprises, by Diwali.
The proposed changes include reducing the number of GST slabs and lowering tax rates on commonly used goods. Currently, the GST system comprises multiple tax brackets, and the government plans to streamline this structure to make it more efficient and consumer-friendly .
India imposes GST at rates of 5%, 12%, 18%, and 28% on the majority of goods and services, excluding gold and silver, while also applying extra taxes on certain products such as cigarettes and high-end automobiles.
Addressing the nation on the 79th Independence Day, Modi said, “We have discussed with states and we will usher in next generation GST reforms by Diwali, which will be a Diwali gift for citizens. Tax on items of common man will be reduced substantially. Our MSMEs will benefit hugely. Daily use items will become cheaper, which will also strengthen our economy.”
