56th GST Council Meeting: The central government is planning a major change in the Goods and Services Tax (GST) system to provide relief to consumers, according to sources. Sources say a proposal is under discussion to either reduce the 12% GST rate to 5% or scrap the 12% slab altogether.
This move is expected to lower prices of many daily-use products that are part of every household’s monthly expenses, especially for middle-class and low-income families struggling with rising costs.
If approved, items currently taxed at 12% would become cheaper as they move to the 5% bracket. Reports suggest this could be one of the biggest GST reforms since the system was launched in 2017.
A final decision will likely be taken in the 56th GST Council meeting, which is expected to be held in July 2025. The Council is chaired by Union Finance Minister Nirmala Sitharaman and includes finance ministers from all states and Union Territories with legislatures. An official date has not yet been announced, but the meeting is expected later this month.
Media reports also indicate that the Council may discuss reducing GST on health insurance, which is currently taxed at 18%. The taxation of life insurance and health insurance premiums has been pending review and could be taken up during this meeting.
Another key point expected on the agenda is the GST rate on drones. Media reports say there is a proposal to cut GST on commercial drones from 28% to 5%. Currently, different rates apply depending on whether drones are used for business or personal purposes, and this has confused those in the industry.
The Council may also deliberate on GST rules for virtual digital assets like cryptocurrencies, simplification of compliance measures, and clarifications for sectors such as e-commerce, real estate, and online gaming.
According to reports, this meeting is important because it could settle several long-pending issues and help rationalise GST rates across many sectors. Official confirmation and details are expected once the government announces the agenda for the upcoming GST Council meeting.
