GST Council likely to cut cement levy and simplify tax structure

New Delhi, August 26, 2025 – The Goods and Services Tax (GST) Council is considering a major restructuring that could shift all food and textile items into the 5% GST slab, aiming to simplify the indirect tax regime. This proposal comes alongside discussions to reduce the cement levy from 28% to 18%, a move expected to boost demand in the housing and infrastructure sectors.

According to officials, the Council’s agenda includes revising tax rates on a host of products and services such as consumption items, insurance, and beauty parlours. The simplification plan seeks to eliminate classification concerns and make compliance easier for businesses. The discussions also include moving away from multiple slab rates towards a streamlined system .

The proposed reduction in the cement levy is significant, as cement is a key input in construction and real estate. Lowering the rate is expected to stimulate housing demand, infrastructure growth, and related industries. Analysts suggest the measure would not only benefit developers but also reduce overall construction costs for homebuyers .

In addition, the Council is likely to examine insurance premiums, healthcare services, and personal care segments, with the possibility of lowering GST rates. The aim is to address long-standing industry demands and provide relief to consumers. Experts believe such reductions could enhance affordability while also boosting compliance levels.

Officials also hinted at aligning GST slabs in line with international best practices. A government source noted that simplification of tax rates is vital to reducing litigation and easing business operations. By consolidating food and textile items under the 5% slab, the government expects to address consumer concerns, encourage small businesses, and improve transparency in tax collection.

The GST Council is expected to meet soon to finalise its recommendations. Economists suggest the reforms would mark one of the most substantial overhauls of India’s indirect taxation system since the GST rollout in 2017. Industry leaders are watching the developments closely, as changes in tax slabs can directly impact demand and investment sentiment across multiple sectors.

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