SRINAGAR: From kitchen staples to electronics, and from medicines to automobiles, a wide range of goods and services will become cheaper from Monday as revised Goods and Services Tax (GST) rates on about 375 items come into force. The GST Council, comprising the Centre and states, has rationalised rates across categories, with the new structure taking effect from September 22, coinciding with the start of Navratri.
Prime Minister Narendra Modi, addressing the nation on Sunday evening, hailed the roll-out as the “next generation of GST reforms” and described it as a major step towards Aatmanirbhar Bharat. He called the reductions a “GST bachat utsav” (savings festival) that would touch every family, emphasising that the cuts reflect the government’s guiding principle of naagrik devo bhawah (citizens are like gods).
Mass consumption goods such as ghee, paneer, butter, namkeen, ketchup, jam, dry fruits, coffee and ice creams will attract lower taxes, along with aspirational products like televisions, washing machines and air conditioners. Daily-use items like shampoos, soaps, hair oils, shaving cream and toothpaste will also get cheaper, while GST on talcum powder, face powder and similar products has been slashed from 18 to 5 per cent. Several FMCG companies have already announced new price tags in line with the revision.
In a move set to benefit homebuyers, GST on cement has been cut from 28 to 18 per cent. Medical costs are also expected to ease, with most formulations and devices such as glucometers and diagnostic kits now falling in the 5 per cent bracket. Pharmacies have been directed to revise Maximum Retail Prices accordingly.
The automobile sector is among the biggest gainers, with small and big cars to attract GST rates of 18 and 28 per cent, respectively. Car manufacturers have already announced price reductions.
Services such as those offered by beauty parlours, fitness centres, health clubs, salons and yoga institutes will now be taxed at 5 per cent without input tax credit, down from the earlier 18 per cent with credit.
Unveiling the changes, Modi said the reforms, together with the earlier decision to raise the income tax exemption threshold to Rs 12 lakh, would provide a “double bonanza” to citizens, leading to savings of Rs 2.5 lakh crore. “With the sunrise tomorrow, the next generation GST reforms will come into effect. It will be like a savings festival for every household,” he said.
The Prime Minister also urged citizens to make swadeshi purchases, saying self-reliance in consumption would strengthen the nation just as it had powered the freedom movement. “We have to make every home a symbol of swadeshi. We have to decorate every shop with swadeshi,” he said, appealing to people to consciously choose indigenous goods over imported ones.
Effective September 22, GST will broadly operate under a two-tier system, with most items taxed at 5 and 18 per cent. A 40 per cent rate will apply to ultra-luxury items, while tobacco products will continue in the 28 per cent plus cess category.
Calling the reform a milestone in India’s growth journey, Modi said it would increase ease of doing business, attract investment, boost manufacturing and provide a fresh impetus to micro, small and medium enterprises. “These reforms will accelerate India’s growth story. They will give strength to our resolve for a self-reliant India,” he said.
