Lower GST rates likely to come into force around Mahalaya later this month

Lower GST rates are most likely to come in force later this month around the auspicious day of Mahalaya (September 21,) which marks the beginning of Durga Pooja. The two-day GST council meeting will conclude tomorrow and the government has indicated that measures will be taken to ensure that the rate cuts are made effective in the build up to the festive season.  

The ongoing GST Council meeting is believed to have approved the 5% and 18% dual rate GST structure. Experts are of the view that the rate cut may come in force by the third week of this month. This will coincide with Mahalaya. “Based on trends from the last five GST Council meetings, rate changes typically take 15–30 days for notification and are made effective within one to two days. State governments usually issue their notifications on the same day or within one to two days of the centre, with a common effective date,” said Mahesh Jaising, partner & indirect tax leader, Deloitte India.

“With the 56th Council meeting on September 3–4 and Dussehra festivities starting September 22, implementation is expected by the third week of September. Timely rollout would be crucial—delays may dampen quarter-end sales and consumer sentiment. Early notification is expected to support festive readiness, stabilize demand, and help businesses manage pricing and inventory transitions,” Jaising added.

“Given the scale of rate revisions and the industry’s push to spur demand, it is expected that the government will act quickly, well before the festive season starting with Navratri. Businesses should prepare ERP and billing changes in advance, while customers waiting to purchase may see relief sooner than usual,” said Manoj Mishra, partner and tax controversary management leader, Grant Thornton Bharat LLP.

“Considering the beginning of the festive season and to address a dip in demand due to customers awaiting rate change, the new rate structure may also be made effective mid-month, say from 22nd September, i.e. date of beginning of Navratri or any other later date," said Karthik Mani, partner (indirect tax), BDO India.

The Union government is planning to expedite the process of aligning the systems with the new Goods and Services Tax (GST) rates, post approval of the GST Council, to ensure that the end consumers are able to gain from lower cost of products in the build-up to the upcoming festive season. It may be noted that the festive season this year begins early.