Synopsis : The GST Council is preparing for a pivotal meeting in July 2025 to discuss a rationalisation of the 12% tax slab. The Council will also likely finalise the tax treatment for service intermediaries, potentially offering significant financial relief.
India’s indirect tax regime could soon witness a key shift as the Goods and Services Tax (GST) Council prepares for its next meeting, likely to be held in July 2025. After a gap of more than six months since its last session in December 2024 at Jaisalmer, the Council’s upcoming agenda signals a renewed push toward rationalising the tax structure and easing industry burdens.
One of the headline items up for discussion is the reduction or consolidation of items under the 12% GST slab, one of the four major slabs in the current framework (5%, 12%, 18%, and 28%). This move is expected to simplify compliance, reduce classification disputes, and potentially shift goods or services to adjacent slabs—either down to 5% or up to 18%—as part of a broader effort toward creating a more unified and efficient tax regime.
In addition, the Council is expected to take a final call on the tax treatment of service intermediaries, a long-standing grey area that has impacted exporters, BPOs, and SaaS firms. The lack of clarity on place-of-supply rules and GST applicability on intermediary services has resulted in litigation, tax demands, and compliance headaches. Sources familiar with the matter indicate that a favourable decision could unlock sector-wide relief worth thousands of crores, particularly by exempting or zero-rating certain exports of services and reducing tax burdens on intermediary transactions.
The meeting was originally scheduled for June but got delayed due to a disagreement among Council members over the venue. With consensus now expected, the July meeting will be closely watched by industry players, tax professionals, and policy analysts alike.
The decisions taken at this session could have far-reaching implications—not just for the service sector but also for the overall goal of simplifying India’s GST structure. Experts see these developments as essential steps toward rate rationalisation and creating a more business-friendly tax environment.
Disclaimer : This article is for informational purposes only and should not be treated as financial or legal advice. Please consult a qualified tax advisor for guidance on GST matters.
