The 57th Goods and Services Tax (GST) Council meeting, originally scheduled for September 12, has been rescheduled to October 7 in New Delhi. This session will primarily focus on evaluating the effects of the sweeping rate rationalization implemented nearly a year ago, on September 22, 2025.
Reviewing the 2025 GST Rate Overhaul
During its 56th meeting, the GST Council simplified the previous four-rate structure (5%, 12%, 18%, and 28%) into a new framework featuring two primary rates: 5% and 18%. A special 40% rate was also introduced for certain sin and luxury goods. The upcoming October meeting aims to scrutinize how these revised tax structures have influenced government revenues, consumer spending, and the financial health of states.
Broad Tax Cuts Not Expected Amid Revenue Gains
Despite initial concerns, revenue data following the 2025 rationalization has shown resilience. Gross GST collections reached ₹1.96 lakh crore in October 2025, the first full month under the new rates, marking a 4.6% year-on-year increase. Fiscal Year 2026 concluded with gross GST revenue of ₹22.27 lakh crore, an 8.3% rise over the previous year.
The current fiscal year continues this positive trend, with record collections of ₹2.11 lakh crore in July and ₹1.998 lakh crore in August, representing year-on-year growth of 15.4% and 14.8%, respectively. Cumulatively, April-August gross GST collections hit ₹10.43 lakh crore, up 11% from a year prior.
Against this backdrop, sources indicate that the Council is inclined to consolidate these gains rather than pursuing another round of large-scale rate reductions immediately. States are also seeking more clarity on the revenue impact of the overhaul, and broader economic uncertainty, partly due to geopolitical developments like the West Asia crisis, further dampens prospects for sweeping cuts.
Potential for Product-Specific Adjustments and Other Discussions
While broad-based rate cuts are unlikely, the Council may consider specific product-related proposals. One such item that could come up for discussion is the 18% GST rate on mobile phones, particularly in light of weakening demand for handsets. However, this issue is not yet part of the confirmed agenda.
Other outstanding matters that the Council might address include issues related to input tax credit, registration processes, refund mechanisms, compliance challenges, and dispute resolution. Any deliberations on further customs-related rationalization will also be closely monitored by industry stakeholders.
Ultimately, the Council's overarching focus remains on determining whether the 2025 rate adjustments have successfully translated into lower consumer prices and stimulated stronger demand before contemplating any new major changes to the tax structure.