New Delhi: Days after Prime Minister Narendra Modi unveiled the roadmap for next-generation GST reforms, the GST Council, led by Union Finance Minister Nirmala Sitharaman, on Wednesday cleared a significant restructuring of GST rates by abolishing the 12% and 28% tax slabs.
Announcing the changes, Sitharaman said the reforms were aimed at easing the burden on the common man. “Every tax on daily-use items has been thoroughly reviewed, and in most cases, the rates have been substantially reduced. Labour-intensive sectors, agriculture, and healthcare have been prioritised, while critical drivers of the economy have been given special attention,” she told reporters.
What Gets Cheaper
- Dairy products: UHT milk is now exempt from tax, while condensed milk, ghee, butter, paneer, and cheese will see GST reduced from 12–18% to 5%.
- Snacks: Namkeens, bhujia, and chabena will now attract 5% GST instead of 18%.
- Dry fruits: Almonds, pistachios, hazelnuts, cashews, and dates will be taxed at 5% (earlier 12%).
- Sweeteners and foods: Refined sugar, syrups, confectionery items, vegetable oils, animal fats, packaged foods, sausages, fish preparations, and malt-based products will now attract 5% GST.
- Staples: Malt, starches, pasta, biscuits, cornflakes, chocolates, and cocoa products will be taxed at 5% (down from 12–18%).
- Health & Education: Life-saving medicines, health-related goods, and educational services/items will either be exempt or attract 5% GST.
- Personal care: Hair oil, shampoos, toothpaste, and dental floss will fall under the 5% bracket (from 18%).
- Footwear & textiles: Now taxed at 5%.
- Appliances: Select electrical appliances, ACs, and dishwashers will see GST reduced to 18% (from 28%).
- Vehicles: Small petrol, LPG, CNG, and diesel cars/hybrids (within prescribed limits) will now fall under the 18% slab (from 28%).
- Renewables, toys & sports goods: Devices and goods in these categories will be taxed at 5%.
- Handicrafts, leather, and wood products: Brought down to 5%.
What Gets Costlier
- Goods with added sugar or sweeteners will now attract 40% GST (up from 28%).
- Luxury items: Premium goods will remain in the 40% bracket.
- Coal: Tax raised sharply to 18% from 5%.
- Television sets: Now taxed at 18%.
- High-end automobiles: Cars and bikes above 350cc will face a steep 40% GST.
- Cigarettes, tobacco, gutkha, pan masala: No change; existing rates remain.
The reform marks one of the most comprehensive tax overhauls since GST’s rollout, aiming to simplify slabs, support critical industries, and balance affordability with revenue needs.
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