India to cut consumption tax by October, introducing a two-tier GST system of 5% and 18%, affecting most items in the current 12% slab.
India’s government will reduce consumption tax by October, introducing a two-tier GST system of 5% and 18%, replacing some existing 12% and 28% rates, a senior official said.
Most items in the 12% slab, including butter, fruit juices and dry fruits, are expected to move to 5%.
The reforms follow Prime Minister Narendra Modi’s call to support domestic products amid rising tensions with the US over tariffs.
The Trump administration has imposed an additional 25% tariff on top of the existing 25% tariff (effective 1 August) on Indian goods, citing India’s high tariffs, trade barriers, and Russian oil imports.
The GST Council, chaired by the finance minister, will finalise the changes by October 2025.