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Modi 3.0 Simplifies GST: Five Slabs Cut to Three, Savings of ₹2,000/Month Per Family
The GST Council approves a sweeping rationalisation - 5%, 12%, and 28% slabs replaced by three-tier 0%, 8%, and 18% structure.
S
Sanjay Kumar
June 24, 2026
5 min read
New Delhi: In the most significant overhaul of India's Goods and Services Tax since its 2017 rollout, the GST Council has approved a three-slab structure of 0%, 8%, and 18%, collapsing the existing five-rate system.
Essentials including food, medicines, and basic consumer goods remain at 0%. Common consumer products move to 8%, while luxury and demerit goods attract 18%. The 5%, 12%, and 28% slabs are abolished.
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The government estimates the change will save urban middle-class families an average of ₹2,000 per month through lower effective tax on consumer durables, textiles, and healthcare services.
Industry associations lauded the move, noting that compliance costs will fall sharply as businesses no longer need to map thousands of products across a complex slab matrix.
The new structure takes effect from 1 October 2026. The Finance Ministry will release a full classification list by 15 August, giving businesses 45 days to update their billing systems.
