India could soon see a major revamp of its indirect tax system. The Group of Ministers (GoM) gave the green light to a simplified two-slab GST structure of 5% and 18%. The move eliminates the current 12% and 28% brackets. It is being viewed as a landmark step toward making GST more accessible for both businesses and consumers.

The proposal, first floated by the Centre on 15th August, focuses on three major goals—structural reforms, rate rationalisation, and ease of living. Prime Minister Narendra Modi had already hinted at such a change in his Independence Day speech. He stressed the need to make GST more beneficial for the middle class, farmers, MSMEs, and everyday citizens.

Former CBEC Chairman Najib Shah hailed the development as “phenomenal.” He said it delivers on long-standing demands for simplification and rate rationalisation. Since the GoM includes representatives from opposition-ruled states as well, Shah noted that the GST Council will find it tough to reject the proposal.

According to the government’s blueprint, the reform is expected to tackle inverted duty structures and reduce litigation. It aims to create long-term stability in tax rates. Lowering taxes on essential goods, cutting compliance burdens with pre-filled returns, and ensuring faster refunds for businesses are also on the agenda.

If cleared by the GST Council, the shift could not only simplify taxation but also spur demand. It could boost consumption and strengthen revenue collections. This marks one of the most significant changes to GST since its launch in 2017.

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