The Group of Ministers (GoM) meeting is being held today and will conclude tomorrow. This meet is likely to be the critical game-changer in taking forward the next phase of the Goods and Services Tax (GST) restructuring to ease the indirect tax regime and enhance ease of compliance. The GoM will decide the outlines of a much-awaited transformation based on a two-slab GST structure and other structural reforms to reinforce consumption, minimize tax litigation, and promote economic growth. Bihar Deputy Chief Minister Samrat Choudhary posted about the meeting under chairmanship of Finance Minister Nirmala Sitharaman.
नई दिल्ली के विज्ञान भवन में माननीय केंद्रीय वित्त मंत्री श्रीमती @nsitharaman जी की अध्यक्षता में आयोजित GoM की बैठक में बिहार के मुद्दों को लेकर सहभागिता की।
इस दौरान संबंधित राज्यों के माननीय वित्त मंत्रीगण की उपस्थिति में Life & Health Insurance संबंधित अनेक विषयों पर… pic.twitter.com/Bbj8quc0Kk
— Samrat Choudhary (@samrat4bjp) August 20, 2025
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Background and Significance
GoM is constituted of the ministers of important states such as Bihar (chairman Samrat Choudhary), West Bengal, Karnataka, Kerala, Uttar Pradesh, Rajasthan, and Goa. Finance Minister Nirmala Sitharaman is expected to be present and guide the discussions. GoM was formed more than two years ago to settle state apprehensions and reach consensus on GST rationalisation following previous moves to reduce slabs meeting resistance and setbacks.
This session is pivotal because the recommendations by the GoM will determine the agenda of the GST Council, India’s highest decision-making platform for GST issues. The council is likely to sit in September 2025 to finalize and approve the reforms for rollout, possibly planning for the Diwali launch.
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Important Parameters to Watch
1. Two-Slab GST Design
The key to the reform is the mooted move away from the existing four-slab regime (5%, 12%, 18%, 28%) to a more straightforward two-slab system, presumably 5% and 18%. The reorganization seeks to lower tax on various everyday items and consumer products, promoting greater demand and alleviating compliance hassles for businesses and consumers.
2. Composition of Items in Slabs
Which products and services come under the 5% and 18% slabs will be closely examined. Baseline products such as food, milk, butter, and footwear less than ₹1,000 are likely to be moved to the lower slab. Services and premium products, however, will be kept in the higher slab.
3. Revenue Neutrality and Compensation
The GoM needs to weigh tax rate reductions against maintaining enough revenue for states. State compensation for any loss of revenue and arrangements to deal with GST shortfalls will be considered. This balance is critical considering how GST fetches enormously for both the central and state governments.
4. Process and Compliance Reforms
Aside from rate rationalisation, the GoM will more than likely consider procedural reforms like expediting the registration process, auto-refunds, improved digital interfaces, and dispute resolution processes to enhance the taxpayer experience.
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5. Impact on Small Businesses and Consumers
Steps to simplify compliance for MSMEs and minimize cascading taxes will take center stage. The reform is aimed at reducing the effective burden of tax on consumers and facilitating small businesses with simplified rules.
6. Consultation and Consensus Building
The GoM is a conversation among the Centre and states, and it requires consensus and compromises. Onlookers will observe the cooperation and tone among member states and how effective the conversation is in surmounting earlier delays and disputes.
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Expected Outcomes and Market Impact
Markets and economists anticipate that the GoM’s suggestions would put India on course for a simpler GST, favorably influencing inflation, consumption, and general economic momentum. A successful transformation could boost retail demand by cutting prices on essential goods while advancing government revenue reliability through better compliance.
In short, the August 20-21 Group of Ministers meet is a policy high-wire act that will determine India’s course on GST reform. The terms of slab rationalisation, revenue management, procedural simplicity, and building consensus will be ones to watch as the nation seeks to upgrade its tax regime for greater economic good.
