Centre Mulls GST Reduction on Essential Commodities Amid Revenue Surge

 New Delhi, July 2, 2025 — In a move aimed at providing relief to households grappling with inflation, the central government is actively considering a reduction in Goods and Services Tax (GST) rates on a range of essential commodities, including pulses, puffed rice, tea, and besan (gram flour), official sources confirmed.

The proposal, currently under deliberation, is seen as a response to mounting concerns over the rising cost of living, particularly among middle- and low-income families. A downward revision in GST rates on these everyday items is expected to ease the financial burden on millions of Indian households.

According to sources, robust GST revenue collections have created the fiscal headroom necessary to accommodate such a measure. In June 2025, gross GST collections stood at ₹1.85 lakh crore, reflecting a 6.2% increase over the ₹1.73 lakh crore collected during the same month in 2024. However, this represented a slight decline from the record ₹2.01 lakh crore collected in May 2025—a 16.4% year-on-year surge from ₹1.72 lakh crore in May 2024.

The potential tax cut has garnered support across political lines, with several opposition-ruled states as well as BJP-led administrations submitting formal requests for a rate reduction on key daily-use goods.

A final decision is expected to be taken at the upcoming meeting of the GST Council, the apex decision-making body on indirect taxation. The Council is chaired by Union Finance Minister Nirmala Sitharaman and comprises finance ministers from all states and Union Territories with legislatures. While the official date of the meeting is yet to be announced, it is likely to convene later this month.

If approved, the proposed rate cuts could mark a significant policy shift aimed at balancing fiscal prudence with public welfare, signalling the government’s responsiveness to consumer needs amid fluctuating economic pressures.