Centre Announces Revised CGST Rates Effective September 22

Quick Summary

• The Union Finance Ministry has notified revised Central GST (CGST) rates, effective from September 22, 2025.
• States are required to notify corresponding State GST (SGST) rates by Monday (September 22, 2025).
• GST revenue is divided equally between the Center and the States.
• New tax rate structure will include two primary slabs: 5% and 18%.
• Ultra-luxury items will attract a tax of 40%, while tobacco-related products remain in the existing slab of 28% plus cess.
• Previous GST slabs included four brackets: 5%, 12%, 18%, and 28%, supplemented by a compensation cess on luxury/sin goods.
• This reform seeks to reduce tax burdens on moast goods, urging industries and businesses to pass thes savings to consumers promptly.
• Industry experts outlined steps for successful implementation, emphasizing timely updates to systems, pricing revisions, and operational transparency.

Indian Opinion Analysis

This notification signifies an crucial shift in India’s indirect taxation policy aimed at simplifying rates under Goods and Services Tax. The reduction of tariffs could alleviate consumer costs if companies effectively transfer these benefits across supply chains. However, it places meaningful responsibility on businesses for compliance with revised pricing structures. Experts have stressed aligning technology systems like ERP platforms as key enablers for seamless implementation.

From an economic outlook, rationalizing tax rates may enhance domestic consumption by reducing prices on several goods. However, maintaining equilibrium between reduced revenue collection from lower slabs and fiscal adequacy for both Centre and States poses challenges-particularly amid ongoing growth programs requiring consistent funding streams. Successful industry adoption thus remains critical for its broader impact.

Read more here.