GST Council has proactively recommended to lower the rates of GST across a wide range of goods and services in its 56th GST Council meeting held on 03.09.2025. The recommendation, undisputably, reflect a multi-sectoral approach with special emphasis on the common man, farmers, labour-intensive industries, health and other key sectors of the economy. The rationalisation of the four-tier GST structure into a simplified two-rate framework i.e., a standard rate of 18% and a merit rate of 5%, with a special de-merit rate of 40% on selected goods is a bold step towards making taxation simpler, with minimal disputes and which is more rational.
These reforms will significantly reduce the tax on daily-consumed food and beverage items. From breakfast essentials like milk, butter, cheese, breads, cornflakes and coffee, to indulgences like chocolates, cakes, pastries, and juices, most items have moved to a concessional 5% or even Nil rate. Meanwhile, unhealthy/high-end food items such as carbonated and caffeinated beverages are recommended to be taxed at a de-merit rate of 40% to balance public health priorities.
To know more in detail, refer to the document attached herewith.