GST Council to deliberate reduction of 12% tax slab
After a six-month break, the GST Council is meeting in early July 2025 to talk about dropping or shifting the current 12% tax slab.
This could potentially affect the tax rates on everyday items like toothpaste and soap, which are currently taxed at 18%, if they are moved to a lower tax bracket.
The council will also look at changing how service providers working with foreign clients are taxed.
Impact on consumers and businesses
If these changes happen, daily essentials might cost less, but there's a catch: moving items to a lower slab could impact how manufacturers claim tax credits, which might affect final prices.
Plus, tweaking taxes for service intermediaries could save businesses around ₹3,500 crore and make exporting services easier.
Overall, it's part of a bigger plan to simplify India's tax system and make life smoother for both consumers and businesses.