Days after Prime Minister Narendra Modi announced next-generation GST reforms, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved a major rate overhaul on Wednesday, scrapping the 12% and 28% slabs.
Sitharaman said the reforms were designed with the common man in mind. “Everyday-use items have seen significant rate cuts. Labour-intensive industries, farmers, the agriculture sector, and healthcare have all been given priority,” she said.
What Gets Cheaper
Milk & Dairy: UHT milk now tax-free; ghee, butter, paneer, cheese down to 5% (from 12–18%).
Food Items: Namkeens, bhujia, dry fruits, sugar products, chocolates, biscuits, pasta, cornflakes — now taxed at 5%.
Household & Personal Care: Hair oil, shampoo, toothpaste, dental floss — reduced to 5%.
Appliances: TVs, ACs, dishwashers at 18% (from 28%).
Vehicles: Petrol/LPG/CNG/diesel cars (within specified limits) down to 18% (from 28%).
Others: Fertilisers, renewable energy devices, sports goods, toys, footwear, textiles, handicrafts, leather, and wood products at 5%.
Healthcare & Education: Life-saving drugs, health products, and education-related services at 5% or nil.
What Gets Costlier
Sugary Goods: Items with added sugar/sweeteners taxed at 40% (up from 28%).
Luxury & Sin Goods: Cigarettes, pan masala, tobacco, gutkha remain in higher slabs; luxury cars and bikes above 350cc now at 40%.
Coal: Raised to 18% (from 5%).
Electronics: TV sets at 18%.