GST Council May Shift Textiles To 5% Slab
The 56th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, is set to take place on September 3–4, 2025 in New Delhi, where key proposals to simplify the tax regime and ease costs for consumers will be discussed.
According to reports, the government is considering moving all food and textile products into the 5% GST slab to eliminate classification disputes. A major proposal on the agenda is to reduce GST on cement from 28% to 18%, a long-standing demand from the construction and infrastructure sectors, which is also expected to lower costs for homebuyers.
The Council may also deliberate bringing mass-consumption services like salons and beauty parlours down from 18% to 5% GST. Currently, small salons are exempt, while mid- and high-end outlets pass on the 18% levy to customers.
In a consumer-friendly move, the government is also weighing zero GST on term assurance and individual health insurance policies to boost penetration. For automobiles, small cars (under 4 metres) may attract 18% GST, while larger vehicles could face 40%.
An Officers’ Meeting is scheduled for September 2, 2025, ahead of the Council sessions. Sources indicated that the government is keen to implement rationalised rates before the Dusshera-Diwali festive season to spur demand.
The proposals follow recommendations by the Group of Ministers (GoM) on rate rationalisation, which recently forwarded a plan for a simplified dual-slab structure – 5% and 18% GST – replacing the current 12% and 28% brackets.
