GST Average Rate Falls To 10.84% After September Rate Rationalisation

Last Updated:October 08, 2026, 9:58 PM IST

The average GST rate has fallen to 10.84% from 11.4% in 2023 after the GST Council rationalised tax slabs last September, while GST collections grew 11.6% in H1 FY27.

GST rate rationalisation brings average rate down to 10.84%

The average Goods and Services Tax (GST) rate has fallen to 10.84 per cent following the rationalisation of GST rates in September last year, sources said.

The average rate stood at 11.4 per cent in 2023. The latest decline comes after the GST Council restructured the indirect tax regime by reducing the number of tax slabs.

GST Rate Structure Rationalised

At the time of the launch of the Goods and Services Tax on July 1, 2017, the revenue neutral rate (RNR) was calculated at 15.8 per cent.

In September last year, the GST Council rationalised the four-slab structure of 5, 12, 18 and 28 per cent into a two-slab structure of 5 and 18 per cent.

A 40 per cent GST rate was also introduced for sin and luxury goods.

GST Collections Grow Despite Rate Cuts

Briefing reporters after the 57th GST Council meeting on Thursday, Finance Minister Nirmala Sitharaman said GST revenues had continued to grow despite the rate cuts announced in September.

GST collections in the first six months of the financial year 2026-27 grew 11.6 per cent to Rs 12.46 lakh crore.

No Discussion On GST For UPI Transactions Above Rs 2,000

Sitharaman also said the GST Council did not discuss the issue of levying GST on Merchant Discount Rate (MDR) for UPI transactions above Rs 2,000.

The issue was not taken up for discussion at the meeting, according to the finance minister.

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What is the average GST rate following the September rate rationalisation?

The average Goods and Services Tax (GST) rate has fallen to 10.84 per cent following the rate rationalisation.

How was the GST tax slab structure changed during the council rationalisation?

The GST Council rationalised the previous four-slab structure of 5, 12, 18, and 28 per cent into a simplified two-slab structure of 5 and 18 per cent, alongside a 40 per cent rate for sin and luxury goods.

Did the GST Council discuss levying tax on UPI transactions above Rs 2,000?

No, Finance Minister Nirmala Sitharaman confirmed that the GST Council did not discuss the issue of levying GST on Merchant Discount Rate (MDR) for UPI transactions above Rs 2,000.

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Pragya Bahuguna

Pragya Bahuguna is a digital journalist at News18.com, covering national and international news, including Indian politics and geopolitics, with an interest in environment and climate affairs. She hol…Read More

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