<h1>GST Council to weigh compressing slabs to mainly 5% and 18%, 40% on select luxury goods, revenue-sharing dispute</h1> The GST Council will consider a central government proposal to compress tax slabs into predominantly 5% and 18% rates, with a special 40% rate for select demerit and luxury goods, and potential additional levies. The reform would move most current 12% items to 5% and many 28% items to 18%, with differential treatment proposed for entry-level automobiles and EVs (centre favors 5%, a multistate ministerial group favors 18% for EVs). Opposition-ruled states seek compensation or sharing of any revenue losses and dispute the distribution of higher levies; the prior compensation mechanism expired in 2022, creating a key legal and fiscal dispute to be resolved.