GST Rate Changes Only Once a Year, From 1 April: Why Tax Stability Matters
The GST Council will now take up proposals to change Goods and Services Tax (GST) rates only once a year, according to Finance Ministry sources.
All GST rate changes will come into effect from 1 April, the first day of the financial year (fiscal year). This gives businesses one fixed date to plan around.
The reason given is stability: businesses can price their long-term contracts and plan their investments better when tax rates do not change in the middle of the year.
This comes about a year after the Council moved GST from four main rates (5%, 12%, 18%, 28%) to two main rates (5% and 18%), with effect from 22 September 2025. Monthly GST collections have shown double-digit growth since June 2026.
The 57th GST Council meeting is scheduled for 8 October 2026. Rate changes are not on its agenda. It will deal with small fixes and remove confusion in some rules.
The Council may approve a single 5% GST rate, without input tax credit, for deliveries made through e-commerce platforms.
The GST Council (Article 279A)
The GST Council is the constitutional body that decides the main rules of GST: the tax rates, which goods and services are taxed or exempt, and the model laws. It is made up of the Union Finance Minister and the finance ministers (or ministers in charge of taxation) of all states. It was created by Article 279A, which the 101st Constitutional Amendment Act, 2016 added. Because the Centre and states sit at one table and decide together, it is often called the best example of cooperative federalism in India.
The rule that rate proposals will be taken up only once a year is a decision about how the Council itself works. It uses its power under Article 279A to decide rates, but chooses to use it on a fixed yearly cycle so that rate changes start only on 1 April.
GST Rate Rationalisation (Two-Rate Structure)
Rate rationalisation means cleaning up and simplifying the tax rates under GST. Until September 2025, most goods and services fell into four main rates: 5%, 12%, 18% and 28%. The 56th GST Council meeting merged these into two main rates, 5% (the "merit" rate for common-use items) and 18% (the "standard" rate), plus a special 40% rate for a small list of luxury and harmful ("sin") goods. Fewer rates mean fewer disputes over which item falls in which slab.
Having moved to two main rates, the government now wants to protect that simple structure from frequent tinkering. Taking up rate proposals once a year and applying them only from 1 April is meant to keep the new structure stable and predictable.
Section 9(5) of the CGST Act, 2017: E-Commerce Operator Tax Liability
Section 9(5) of the Central Goods and Services Tax (CGST) Act, 2017 is a special rule for some services sold through online platforms. Normally, the person who supplies a service pays GST on it. But for certain services that the government notifies, Section 9(5) says the e-commerce operator (the online platform, such as a food-delivery app or a ride-hailing app) must pay the GST, as if the platform itself were the supplier. So when you book a cab or order food through an app, the app, not the driver or the restaurant, pays the GST on that service.
The Council may approve a single 5% GST rate without input tax credit for deliveries made through e-commerce platforms. Delivery services through apps are taxed under Section 9(5), where the platform pays the tax. A single low rate without ITC would make this simpler for platforms, in the same way restaurant food through apps is taxed today.
- GST rate proposals: to be taken up by the GST Council only once a year
- All GST rate changes: effective from 1 April (start of the financial year)
- Two-rate GST structure (5% and 18%, plus a special 40% rate): effective 22 September 2025, approved at the 56th meeting on 3 September 2025
- Earlier main slabs: 5%, 12%, 18%, 28%
- 57th GST Council meeting: 8 October 2026; no rate changes on the agenda
- Proposal: single 5% GST rate without ITC for deliveries via e-commerce platforms
- Monthly GST revenue: double-digit growth since June 2026
- GST Council: Article 279A, 101st Amendment Act, 2016; Centre's vote weight one-third, states two-thirds; decisions by three-fourths of weighted votes