In a landmark decision, the 56th GST Council Meeting chaired by Union Finance Minister Nirmala Sitharaman approved reducing the Goods and Services Tax (GST) slabs from four (5%, 12%, 18%, and 28%) to just two — 5% and 18%. The changes will take effect from September 22, the first day of Navratri.
Big Relief on Daily Essentials
Consumers will benefit significantly as GST on several daily use items has been reduced or removed entirely. Hair oil, toothpaste, toilet soaps, and shampoos will now attract just 5% GST instead of 18%. Popular edibles like paneer, paratha, and roti will fall under the nil tax bracket. Even butter, ghee, cheese, and dry fruits will now be taxed at 5%, down from 12–18%.
Healthcare and Education Get a Boost
The healthcare and education sectors also received substantial relief. Health and life insurance, previously taxed at 18%, will now be GST-free. Items such as thermometers, diagnostic kits, oxygen cylinders, corrective spectacles, and glucometers will now attract just 5% GST. In education, essentials like maps, notebooks, pencils, crayons, and erasers have been exempted completely.
Support for Farmers and Auto Sector
The agriculture sector has also been prioritized, with tractor tyres, sprinklers, drip irrigation systems, and agro-machines shifted to 5% GST. The automobile industry sees a major reduction, with small cars, motorcycles (below 350cc), three-wheelers, and transport vehicles now taxed at 18% instead of 28%. This move is expected to boost demand in rural and urban markets alike.
Appliances Become Affordable
Electronic appliances such as air conditioners, large televisions, monitors, and dishwashers will now be available at 18% GST instead of 28%. This festive season, consumers may see noticeable price drops across showrooms and e-commerce platforms.
Sin Goods Remain Untouched
Luxury and sin goods like cigarettes, gutkha, pan masala, alcohol, and aerated drinks will continue to attract the highest GST slab of 28% or more, ensuring revenue stability while discouraging harmful consumption.
Conclusion
The GST Council’s move comes as a significant step to ease inflationary pressure, boost consumption, and simplify compliance. By cutting rates across essentials, healthcare, education, agriculture, vehicles, and appliances, the government aims to stimulate demand and provide festive cheer to millions of households.
