“A big surprise, this Diwali”: PM Modi says that the following GES GST reforms will reduce taxes on daily elements for daily use

Prime Minister Narendra Modi announced, on the day of his independence 2025, that the next wave of goods and services tax reforms will be offered by Diwali, promising tax exemption on daily use and a simpler and easier tax system.

The Prime Minister said: “A big surprise is waiting for all the Indians this Diwali,” declaring that the government will implement the next generation of goods and services tax reforms before the festival season.

He stated that the elements of daily use will become very cheap in the context of planned repairs. Moody also added that small companies and businessmen will benefit from this, which puts this step as pro -consumers and supporters.

While the details are not provided during the letter, the advertisement corresponds to broader policy discussions to restructure the commodity and services tax rate system – especially the proposal to get rid of the slab by 12 % and reset the elements either to 5 % or 18 % categories.

The current commodity and services tax frame in India consists of five initial tax rates – 0 %, 5 %, 12 %, 18 %, and 28 % – along with special rates of 0.25 % and 3 % that apply to precious metals. An analysis of the commodity tax structure and services reveals that approximately 21 % of all goods decrease under the category of 5 %, while taxes are imposed on 19 % by 12 %. The largest share, 44 % of the elements, is subject to tax at a rate of 18 %. The highest plate of 28 % applies to only 3 % of the total goods, which are usually dedicated to luxury or sin.

This announcement comes a few weeks before the 56th Commodity and Services Tax Council meeting, as the main decisions related to rationalizing prices and restructuring compliance are possible.

If passed, these will include the most important changes that focus on the consumer on the GST system since its introduction in 2017.