India to cut goods and services tax rates by October, PM Modi says

Published 15/08/2025, 05:16

Investing.com-- Prime Minister Narendra Modi said on Friday that India will cut Goods and Services Tax (GST) rates as part of “next-generation” reforms to be rolled out by Diwali, aiming to ease the burden on consumers and businesses.

In his Independence Day address at the Red Fort, Modi said the changes would provide substantial tax relief on everyday goods and simplify the current multi-slab structure.

The government is considering consolidating the existing 5%, 12%, 18% and 28% rates by October, with some common-use items moving to lower brackets.

The reforms are intended to stimulate consumption during the festival season and deliver what Modi described as a “double Diwali” for citizens.

Shifting goods from higher to lower slabs could reduce government GST revenues, but may boost economic growth.

A ministerial panel is reviewing the proposals, which are expected to balance fiscal discipline with measures to support demand.

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