Good News? 12% GST Rate Likely To Be Gone Soon: Check Full List Of Items To See Big Change

A huge change is likely to be expected under Goods & Services Tax (GST), providing major relief to consumers and companies. As per reports, the government is mulling to abolishing the 12% GST rate. The Prime Minister's Office (PMO) has reportedly approved this major change.

Notably, items like ghee, butter, mobiles and many other FMCG-related products fall under the 12% GST bracket. They are expected to fall under other GST brackets, such as 5% or 18%.

Currently, there are five GST rates --- 0%, 5%, 12%, 18% and 28%. There are also two special GST rates such as 0.25% and 3%.

About 21% of goods in India fall under 5% GST slab, while 19% goods are under the 12% rate. But the majority of goods, approximately 44% of them, fall under 18% GST rate. At least 3% goods are under the 28% GST rate.

As per Economic Times report, the proposal to remove 12% GST slab will be put forward in the upcoming GST council meeting. This is an attempt to make the tax system easier. Also, as per the report, the Finance Ministry has started discussions with states to implement the changes.

If the 12% GST rate is abolished, items under this slab will become cheaper or expensive ahead. Because, as per the report, items under the 12% slab, may either go to 5% slab or the 18% slab.

GST 12% Rate:

GST rate in India means a tax percentage applied on the sale of goods or services. Therefore, the GST rate is prevalent under the CGST, SGST and IGST Acts. CGST GST rate and SGST GST rate would both be half of the IGST GST rate, as per ClearTax.

In simple words, every business registered under GST must raise invoices with GST amounts charged on the taxable supply value. These GST amounts are derived by multiplying a tax percentage by the taxable supply value. Such as a percentage rate refers to the GST rate, which is added.

Here are the items under the 12% GST Slab:

Products	GST Rate
Butter	12%
Ghee	12%
Processed food	12%
Almonds	12%
Mobiles	12%
Fruit Juice	12%
Preparations of Vegetables	12%
Fruits	12%
Nuts or other parts of Plants, including Pickle Murabba	12%
Chutney	12%
Jam	12%
Jelly	12%
Packed Coconut Water	12%
Umbrella	12%

What To Expect In the Upcoming GST Council Meeting?

"The net GST collections for June 25 have shown a quite muted growth of 3.3% on a year-on-year basis. Looking at the numbers on a month-on-month basis, the net GST collections of June 25 have shown a reduction of ~8.48% compared with net GST collection for May 25, with collections from the domestic market as well as imports showing a reduction," said Karthik Mani, Partner, Indirect Tax, BDO India.

Hence, Mani added, "Such reduction in growth of GST collection would become an important data point for the GST Council, which is reportedly set to consider increase in highest rate slab of 40% to compensate for loss of revenue due to phase out of compensation cess after March, 2026, in its upcoming meeting which is likely to take place in July 2025."

It is expected that the GST council may meet before the Parliament's monsoon session.

The GST Council is a constitutional body responsible for making recommendations on issues related to the implementation of the Goods and Services Tax (GST) in India.

The Council has been instrumental in deciding key issues related to the GST such as tax rates, exemptions, thresholds, and administrative procedures. During its meetings, the GST Council takes decisions through a consensus-based approachevery decision of the GST Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting with a weightage of one-third of the total votes cast to the Centre and a weightage of two-thirds of the total votes cast to the States, promoting the spirit of the co-operative federalism.