Middle Class and Farmers to Benefit from GST Rate Revisions

Government to finalize changes in upcoming GST Council meeting

The government’s proposal to rationalize Goods and Services Tax (GST) slabs is expected to bring significant relief to the middle class, farmers, and small businesses. The plan, first announced by the Prime Minister, will be reviewed by a group of ministers before being placed for final approval at the next GST Council meeting scheduled for October 2025.

 

The proposal seeks to cut the highest GST slab of 28% to 18% for items such as televisions and air-conditioners, reducing the burden on households. Additionally, agriculture-related machinery and equipment will be taxed at only 5%, boosting farming productivity. Essential goods including medicines, education-related supplies, and health check-up equipment will also see lower tax rates.

 

Key highlights:

• Middle-class households to save on electronic appliances.
• Farmers to benefit from reduced GST on farm machinery.
• Health and life insurance premiums to attract zero GST.
• Manufacturers to gain from lower input costs on raw materials.

 

While the reforms could initially reduce GST revenue collections, officials believe the rationalization will stimulate demand and broaden the tax base. Finance Ministry sources said that if approved, the new rates could come into effect from March 2026, coinciding with the withdrawal of the compensation cess.

 

Economists have hailed the proposal as a consumer-friendly step that balances fiscal needs with social welfare.