📄 Abstract
The 56th GST Council meeting of September 2025 announced a structural simplification of India’s Goods and Services Tax architecture — reducing the operative rate landscape to primarily two slabs (5% and 18%) by eliminating the contested 12% middle ground. This reform, signalled by the Prime Minister’s Independence Day address in August 2025, represents the most significant structural change to GST since its implementation in 2017. For the leather sector -a strategically important industry generating US$5.26 billion in annual exports and employing 4.4 million workers -the transition to a two-slab structure creates a distinctive combination of opportunities and new risks. This paper analyses the policy rationale for the two-slab reform, evaluates its design features against international experience with simplified VAT systems, and examines the specific implications for the leather sector’s compliance landscape, export competitiveness, and business performance. Key findings indicate that the reform delivers genuine simplification benefits for mainstream leather producers but introduces a new and potentially disruptive boundary between standard (5%) and premium (18%) leather products that lacks the administrative precision needed to prevent classification disputes. The paper further argues that the reform’s success depends on three implementation prerequisites that policy alone cannot deliver: clear product classification guidance, sustained refund processing improvements, and rate stability commitments. Drawing on comparative analysis of GST/VAT simplification experiences in Canada, Australia, and Singapore, the paper develops a set of design recommendations for maximising the two-slab structure’s effectiveness in the Indian context.
🏷️ Keywords
📚 How to Cite:
Mr. Shashi Kiran, Dr. Bhawana Johri , INDIA’S TWO-SLAB GST ARCHITECTURE: POLICY DESIGN, IMPLEMENTATION CHALLENGES, AND IMPLICATIONS FOR THE LEATHER SECTOR , Volume 14 , Issue 9, September 2026, EPRA International Journal of Economic and Business Review(JEBR) , Pages: 56 - 62 , DOI: https://doi.org/10.36713/epra31571