India is set to roll out a simplified GST structure from September 22, bringing cheer to consumers ahead of Diwali. At its 56th meeting, the GST Council approved a two-tier rate of 5% and 18%, as announced by Prime Minister Narendra Modi in his Independence Day speech.
According to SBI Research, the reform could boost GDP by 1.6%, adding ₹5.31 lakh crore to consumption.
What Gets Cheaper?
Essentials: Cooking oils, sugar, milk powder, chocolates, and medicines will drop from 12% to 5%.
Durables & Electronics: TVs, ACs, washing machines, dishwashers, and two-wheelers move from 28% to 18%.
Daily Use Items: Toothpaste, shampoos, and talcum powders also fall into the lower bracket.
The move is expected to revive consumer sentiment, tame inflation, and spur industries like automobiles, electronics, textiles, and agriculture.
However, states have raised concerns about an estimated revenue shortfall of ₹47,700–50,000 crore and are seeking compensation. The Council is still deliberating on rates for luxury and demerit goods.