Sources said the Council approved a number of steps to make GST compliance easier for businesses during the meeting. A key announcement is that the registration timeline will be reduced from 30 days to three for MSMEs and start-ups. Exporters have been promised an automated GST reforms 2025 process too.

As it stands, India has four GST slabs in place, at the rates of 5, 12, 18, and 28 percent. The government is looking at a proposal to shift nearly 90 percent of goods that are currently in the top 28 percent slab down to 18 percent. The Council is also expected to agree to move a large chunk of 12 percent-taxed products to the lowest 5 percent rate. The rationalisation move is estimated to cost the exchequer ₹50,000 crore. But the step is expected to provide relief to consumers and a fillip to domestic consumption.

Textiles, fertilisers, renewable energy, the automotive sector, handicrafts, agriculture, healthcare, and insurance are among the eight segments that are expected to benefit the most from rationalising GST measures for businesses. The Council may also approve the move to exempt certain goods and services from GST altogether.

Of course, the ease of doing business GST will not affect “luxury” and “sin” goods. Tobacco products, high-end cars, and liquor will continue to attract heavy taxes. In place of the outgoing Compensation Cess, these products could now be levied with new cesses, including Health Cess or Green Energy Cess.

Officials have said that the rationale for the GST updates India is that there have been wide variations in the revenue collection in the four slabs in operation over the past eight years. The government has said it expects the biggest beneficiaries of the rationalisation exercise to be the middle class. After all, a large basket of daily use items as well as aspirational products that middle-class consumers buy are likely to be cheaper after GST rates are rationalised.