PM Modi Hints At Next-Gen GST Reforms This Diwali; Lower Taxes On Essentials, Services, Likely
Prime Minister Modi announced "next-generation GST reforms" by Diwali to ease the tax burden on households and small businesses. The GST Council will rationalise tax slabs.
Next GST Council Meeting: On the ramparts of the Red Fort, Prime Minister Narendra Modi hinted that the government will unveil 'next-generation GST reforms" by Diwali this year, aimed at easing the tax burden on households and small businesses.
Calling it as a 'massive gift" to citizens, PM Modi said the reforms will rationalise tax slabs and reduce reduce Goods and Services Tax (GST) rates on essential and daily-use items.
In his 12th consecutive speech, PM Modi said, 'We are committed to making life easier for the common man. This Diwali, we will bring GST reforms that will lower prices and boost compliance".
The Goods and Services Tax (GST) Council, which has not convened for the past eight months, could bring significant tax relief this Diwali, according to tax expert Vivek Jalan, Partner at Tax Connect Advisory Services LLP.
'The GST Council has not met since the last eight months as a massive exercise for rate rationalisation is underway, and a Group of Ministers (GoM) is reviewing the comprehensive rate rationalisation programme," Jalan said. He added that the GoM has yet to submit its report and is 'taking into consideration all representations of industry associations."
Jalan noted that the festive season could see mass consumption goods brought under the lower GST slab of 5%. 'For example, small sachets priced at Rs 10 or less supplied by FMCG players may be considered for the lower tax bracket," he said.
Calling for a 'social face" for GST, Jalan suggested reducing the tax rate on autism centres for children from the current 18% to 5%, a matter that was also discussed in Parliament in March 2025.
He also pointed out that GST on new-age goods like drones — now used extensively in warfare — could be lowered to 5%, while the rate on parts of lithium-ion batteries for electric vehicles should be reduced from 28% to 18% to remove the inverted duty structure and inefficiencies in the GST system.
Industry watchers say these potential tax changes could be part of a broader Diwali bonanza hinted at by Prime Minister Narendra Modi during his Independence Day address from the Red Fort.
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