<h1>Central government merges GST into two rates of 5% and 18%, prompting states to demand multi-year compensation</h1> The central government implemented simplified GST slabs, merging 5, 12, 18 and 28 percent rates into two rates of 5% and 18%, reducing taxes on about 375 goods and cutting retail prices for everyday items, electronics, vehicles and medicines. The finance ministry projects substantial household savings and industry price reductions; the executive frames the change as demand-stimulating fiscal reform. Several state governments and opposition parties contest the move, arguing the Centre will appropriate credit while states bear revenue losses and urging central compensation or guarantees for a multi-year period. The measures raise intergovernmental fiscal disputes over GST revenue sharing and short-term budgetary impacts.