GST Reforms 2025 / You didn't get that big GST relief just by chance; here's the complete story.

GST Reforms 2025: The government had already made extensive preparations to reform the GST rates. Finance Minister Nirmala Sitharaman held continuous meetings with various groups for six months. Prime Minister Narendra Modi had given clear instructions that maximum relief should be given to the middle class and the poor people. Discussions were held at many levels to achieve this objective. Home Minister Amit Shah also held several meetings on this issue so that there is no dispute over tax on politically sensitive items. PM Modi also stressed that the revenue situation should be clear, so that the state governments remain satisfied and the federal structure remains strong.

GST Council meeting: Long discussion, difficult decision

The two-day meeting of the GST Council was held on September 3, 2025. PM Modi had announced relief in GST in his address from the Red Fort. However, opposition states, especially West Bengal, Punjab, Kerala and Karnataka, raised concerns about the lack of revenue. Due to this, the meeting, which was to end by 7 pm, lasted till 9:30 pm.

Opposition states demanded that the meeting be postponed till the next day, but Finance Minister Nirmala Sitharaman was ready to hold discussions overnight to take a final decision. Punjab and West Bengal later agreed, but Karnataka and Kerala wanted written assurances from the Centre to compensate for revenue loss.

How was consensus reached?

During the deadlock in the meeting, Chhattisgarh Finance Minister OP Choudhary suggested that if Karnataka and Kerala do not agree, then voting should be done. Decisions are usually taken by consensus in the GST Council, and voting is rare. Choudhary reiterated his point repeatedly, after which Nirmala Sitharaman also clarified that those who want voting should say it openly. This led the opposition states to fear that opposing the voting would send the wrong message to the public. Finally, West Bengal mediated and persuaded Karnataka and Kerala. In this way, late at night, all the states agreed, and the Finance Minister announced the reforms.

Finance Minister's assurance: There will be no injustice

Nirmala Sitharaman made it clear in the meeting that there will be no injustice to any state. Pointing towards the table, he said, "The money kept here belongs to both the Centre and the states. If the states are suffering, then the Centre is also suffering." He said that the priority at this time is to provide relief to the general public. He assured the states that their interests will be taken care of and the Centre and the states will face this challenge together.

Effect of GST reform

According to sources, the reform in GST rates may affect revenue collection in the first six months. A decrease in collection may be seen in the remaining period of this financial year. However, positive results are expected from the next financial year. Due to the reduction in GST rates, people will have more money, which will increase their purchasing power. This will increase revenue in the long run, and the economy will get a boost.