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The Union Finance Ministry has notified new Central GST (CGST) tax rates for goods, which will be effective from September 22, 2025.
States will now have to follow suit and notify the State GST (SGST) rates to be levied on goods and services beginning Monday (September 22, 2025).
Under GST, the revenues are shared equally between the Centre and the States. Effective Monday (September 22, 2025), GST will be a two-tier structure, wherein the majority of goods and services will attract tax of 5 and 18%.
A 40% tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28% plus Cess category.
Currently, Goods and Services Tax (GST) is levied in four slabs of 5, 12, 18 and 28%. Besides, a compensation cess is levied on luxury items and demerit or sin goods.
With the reduction in rates on most goods, the onus is now on trade and industry to pass on the benefit of these tax rate changes to consumers and align compliance in a timely manner.
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