India’s Goods and Services Tax (GST) system is heading for a major revamp, one that Prime Minister Narendra Modi has described as a “next-generation” reform. The new structure is expected to reduce the tax burden on essential and consumer goods, making several products cheaper for the common man.
Sources indicate that a simplified two-slab system of 5% and 18% will replace the current four-tier system of 5%, 12%, 18% and 28%. As a result, many goods now taxed at 12% and 28% will move to lower categories, directly benefiting consumers.
ALSO READ| 56th GST Council Meeting on September 3–4 to Discuss Major Tax Reforms
What Gets Cheaper Under New GST Rates for Daily-Use Items
A large number of daily-use products are expected to become more affordable under the new GST system. Items such as toothpaste, pressure cookers, umbrellas, sewing machines, bicycles, and small washing machines could see a price drop.
Readymade garments priced above ₹1,000, footwear between ₹500–₹1,000, school stationery, hair oil, and processed food are also likely to be shifted into the 5% GST slab. This restructuring aims to lower household expenses and ease inflation pressures.
Electronics and Gadgets
Consumers of electronics may see significant relief. Mobile phones, laptops, and desktop computers are among the products expected to move into lower GST brackets. Ceramic tiles, agricultural tools, and vaccines are also likely to be included in the reduced tax list.
ALSO READ| Modi Independence Day GST Announcement Signals Major Two-Slab Tax Reform
For households, this could mean lower costs for essential devices, giving a boost to digital adoption and easing the financial burden on students and working professionals.
Automobiles
The automobile industry is set to benefit the most. Passenger vehicles and two-wheelers, currently taxed at 28% plus cess, are expected to be reclassified into the 18% slab. This could result in a 10% reduction in car and bike prices.
Electric vehicles will continue to attract only 5% GST, ensuring that EV adoption remains affordable and in line with India’s green energy goals.
Markets have already responded positively — the Nifty Auto index surged 4.6% on Monday following reports of the proposed changes.
What Will Stay Costly Under New GST Rates
While many products will see price cuts, a handful of items will continue to attract higher levies. A special 40% “sin tax” will apply to tobacco products and a small group of ultra-luxury goods. Meanwhile, televisions, refrigerators, air-conditioners, large washing machines, cement, and ready-mix concrete are expected to stay within the 18% GST category.
The government is confident that reducing tax rates on mass-consumed goods will boost consumer spending, spur demand, and strengthen India’s growth momentum. The final product list will be officially announced by the GST Council later this month.
Get Latest News Live on MTIMES along with Breaking News and Top Headlines, Political News and around The World.
You May Like
Trending Searches Today |
Israel Claims 75% Control of Gaza: 2,000 Terrorists Eliminated, 10,000 Targets Struck
India Successfully Test-Fires Nuclear-Capable Agni-5 Missile
Modi Independence Day GST Announcement Signals Major Two-Slab Tax Reform
OSSSC Cancels and Reschedules Preliminary Exam for RI, ICDS Supervisor, ARI, Amin & SFS Posts
Shreyas Iyer Emerges as Frontrunner to Replace Rohit Sharma as India’s ODI Captain: Sources
- Operating System, PrimeOS: Experience the best of both worlds with PrimeOS. Enjoy Android’s familiarity and vast app eco…
- Blazing-Fast 4G LTE: Stay connected anywhere with integrated 4G SIM connectivity. No Wi-Fi? No problem! Work, browse, or…
- MediaTek Power: The Mediatek MT8788 processor at 2 GHz ensures smooth multitasking, fast app launches, and efficient per…
- Processor – AMD Athlon Silver 7120U (up to 3.5 GHz max boost clock, 2 MB L3 cache, 2 cores, 2 threads) ; Memory – 8 GB D…
- Display and Graphics – 39.6 cm (15.6″) diagonal, HD (1366 x 768), narrow bezel, anti-glare, 250 nits, 45% NTSC; Graphics…
- Operating System & Preinstalled Software: Windows 11 Home
- Operating System, PrimeOS: Experience the best of both worlds with PrimeOS. Enjoy Android’s familiarity and vast app eco…
- Blazing-Fast 4G LTE: Stay connected anywhere with integrated 4G SIM connectivity. No Wi-Fi? No problem! Work, browse, or…
- MediaTek Power: The Mediatek MT8788 processor at 2 GHz ensures smooth multitasking, fast app launches, and efficient per…