The correct answer is 5% and 18%. In News • In a landmark GST reform, the GST Council cut India’s four tax slabs to just two—5% and 18%—effective from September 22, 2025. • This move abolished the 12% and 28% slabs and was described as a “Diwali gift” for the middle class by Prime Minister Narendra Modi. Explanation & Key Takeaways: • Only two slabs now remain for most goods and services: 5% (essentials) and 18% (consumer durables & services). • The Council abolished the 12% and 28% slabs to simplify India’s GST system. • A special 40% slab was introduced for harmful goods like tobacco, sugary drinks, and super-luxury items. • The reform is expected to ease household budgets, spur consumption, and boost economic growth. Related Concepts: • Goods under 5% slab • Essentials: butter, ghee, paneer, biscuits, edible oils, sugar, dry fruits. • Healthcare: life-saving medicines, medical devices. • Education: books, stationery, bicycles, pencils. • Everyday items: soaps, shampoos, toothpaste, textiles, footwear, umbrellas. • Goods under 18% slab • Consumer durables: ACs, refrigerators, TVs, washing machines (down from 28%). • Coal shifted to 18% from earlier 5%, raising industrial costs. • Goods under 40% slab • Sin goods: tobacco, pan masala, gutkha, cigarettes, bidis. • Sugary beverages, premium liquor, yachts, and luxury vehicles. • Economic Impact • Expected to reduce household expenditure and increase consumer demand. • Support for small businesses and farmers through lower GST on fertilisers and textiles. • Maintains fiscal balance by taxing luxury and sin goods higher.