56th GST Council Meet Brings Major Reliefs and Tax Reforms

56th meeting of the Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman, has introduced several significant changes to the current taxation system. These decisions will come into effect from 22nd September 2025 and are aimed at simplifying compliance, reducing burdens, and ensuring fair taxation across sectors.

One of the most notable announcements is the complete removal of GST on life and health insurance. This step is expected to provide direct relief to millions of households, making essential insurance services more affordable and accessible for the common man.

The Council has also simplified the GST structure by introducing a dual rate system of 5% and 18%, thereby eliminating the earlier 12% and 28% slabs. This move is designed to streamline processes, reduce confusion for taxpayers, and encourage transparency in business operations.

At the same time, the Council has approved a 40% consumption tax on so‑called “sin goods”, which include cigarettes, tobacco, pan masala, aerated drinks, luxury cars, and the rapidly growing online gaming sector. The intent is to discourage harmful consumption while enhancing revenue collection from non‑essential or luxury categories.

In summary, the Council’s latest decisions reflect a balance between providing relief to citizens and ensuring sustainable tax revenue.