GST Reduction from 12% to 5%: January 2018 Council Recommendations
At its meeting on 18 January 2018, the GST Council recommended reducing the GST rate from 12% to 5% for certain goods, including specified straw and wickerwork articles and velvet fabric. The historical list and HSN classifications are reproduced below.
Goods recommended for GST reduction from 12% to 5%
The original announcement identifies the following two entries. HSN refers to the Harmonised System of Nomenclature, which is used for classification of goods under the GST tariff schedules.
| No. | HSN heading / tariff item | Goods description | Earlier rate | Recommended rate |
|---|---|---|---|---|
| 1 | 4601, 4602 | Articles of straw, of esparto or of other plaiting materials; basketware and wickerwork | 12% | 5% (2018 recommendation) |
| 2 | 5801 37 20 | Velvet fabric | 12% | 5% (2018 recommendation) |
The figures in the table describe the 18 January 2018 recommendation only. Product-specific tariff classification and subsequent notifications must be checked for any present-day supply.
Legal framework: how a GST rate change becomes effective
Article 279A of the Constitution of India
Article 279A establishes the GST Council and provides for its recommendations on GST-related matters, including rates, exemptions and model laws. The Council's recommendation is an important policy step; the applicable statutory notification determines the legally chargeable rate.
Section 9(1) of the Central Goods and Services Tax Act, 2017
Section 9(1) provides for the levy and collection of central GST on intra-State supplies of goods or services or both, at rates notified by the Central Government on the recommendations of the GST Council, subject to the statutory framework. The corresponding State GST legislation governs the State tax component.
Section 5(1) of the Integrated Goods and Services Tax Act, 2017
Section 5(1) governs the levy of integrated GST on inter-State supplies at notified rates. The IGST rate applicable to a supply should be verified separately from a historical reference to combined intra-State GST rates.
Section 11 of the CGST Act: exemptions
Section 11 empowers the Government, on the recommendations of the GST Council, to grant exemptions subject to statutory conditions. A reduced rate and an exemption are different legal treatments; neither should be inferred from a historical Council announcement alone.
Section 14 of the CGST Act: change in rate of tax
Section 14 contains special rules for determining the time of supply where the rate of tax changes. Depending on the timing of supply, invoice and payment, the applicable rate may require analysis under this provision.
How to verify the currently applicable GST rate
Identify the precise goods and their HSN classification; check the latest central and corresponding State or IGST rate notifications, including amendments, effective dates and any conditions. For example, goods under headings 4601 and 4602 should not automatically be treated identically to every other article made from similar materials, and tariff item 5801 37 20 should be checked against the actual product description and current schedule.
For the historical changes, the GST Council recommendations were followed by statutory notification processes; this page does not assert that the same 5% rate continues to apply today. Check the official texts before filing returns, issuing invoices or determining tax liability.
Official GST and legislation resources
- GST Council - meeting recommendations and press releases.
- CBIC GST portal - central GST notifications and circulars.
- CBIC Tax Information Portal - search tax notifications and amendments.
- India Code - legislation including the CGST and IGST Acts.
- GST common portal - compliance and taxpayer services.
Related information from the original website
Additional links retained from the original page:
- How to save tax on Long Term Capital Gain from sale of Property
- How to save Income Tax on your Income. 27 options to reduce taxable income and save Income Tax and Capital gain tax in India
- Judicial Appointment Notifications, Number of Vacancies and Last date to apply for Judicial Jobs
- Legal Jobs, Consultant Post, Corporate Lawyer and Advocate Vacancy
Editorial update: 21 October 2026. This article preserves the historical recommendation and provides general statutory context; the current classification and rate must be confirmed from the applicable notifications.