PM Modi Highlights Double Bonanza as GST Reforms Bring Relief to Citizens

Prime Minister Narendra Modi on Sunday said that the reduction in Goods and Services Tax (GST) rates, coupled with earlier income tax relief, will create a “double bonanza” for citizens. Addressing the nation on the eve of the implementation of the new GST reforms, he stressed that these changes will directly benefit the poor, the middle class, and the emerging neo-middle class.

The Prime Minister described reforms as a “continuous process” and said that the latest GST changes reflect India’s commitment to meet current needs and future dreams. He also extended greetings for Shardiya Navratri, noting that the first day of the festival coincides with the implementation of the next-generation GST reforms.

Double Bonanza: GST Reform and Income Tax Relief

PM Modi said that the latest tax reforms are designed to give citizens more purchasing power. He explained that while income up to ₹12 lakh has already been made tax-free this year, the GST reforms will further reduce household expenses.

“This year, the government presented a gift by making income up to ₹12 lakh tax-free. With the reduction in GST, citizens will now find it easier to fulfil their dreams. The poor, the middle class, and the neo-middle class will all benefit,” he said.

He further announced that 25 crore Indians have overcome poverty in the last eleven years, creating a strong and aspirational neo-middle class that is driving India’s growth story.

Simplified GST Structure with Two Slabs

The new GST structure, approved during the 56th GST Council meeting, will come into effect from September 22, 2025. The four-slab system has been replaced by a simplified two-slab regime:

Category	Earlier GST Rate	New GST Rate
Essential Goods (food, medicines, soaps, insurance, etc.)	12% or 18%	5%
General Goods & Services	18%	18%
Luxury & Sin Goods	28%	40% (unchanged)

PM Modi emphasized that this restructuring will make daily items more affordable for households while boosting ease of compliance for businesses.

Impact on FMCG and Dairy Sector

The FMCG and dairy industries are among the biggest beneficiaries of the new GST regime. Major brands such as Amul and Mother Dairy have already announced price reductions on essential products.

• Amul butter (100g): Reduced from ₹62 to ₹58
• UHT milk (1 litre): Reduced from ₹77 to ₹75
• Paneer, ghee, cheese, ice cream, frozen foods: Shifted to 5% GST slab

These reductions reflect the direct pass-through of GST cuts to consumers, ensuring tangible savings for households.

Reforms Aligned with ‘One Nation, One Tax’

Looking back at the journey of GST since its rollout in 2017, PM Modi highlighted how it ended decades of multiple taxes such as Octroi, VAT, excise, and service tax.

He recalled the situation before GST, when companies had to cross countless checkpoints to move goods between states. He said the new GST reforms represent a “GST Bachat Utsav” and fulfil the long-cherished dream of “One Nation, One Tax.”

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