The 56th meeting of the GST Council, led by Finance Minister Nirmala Sitharaman, has approved a major change in GST rates. The council decided to remove the 12% and 28% tax slabs. The new structure will start on September 22, the first day of Navaratri.There will now be two main GST rates: 5% and 18%. A new 40% tax will apply to luxury and sin goods. Tobacco products and cigarettes will still have a 28% tax plus compensation cess until loan repayments are complete.
Nirmala Sitharaman said the reforms focus on helping the common man. āDaily-use items have been reviewed carefully. In most cases, rates have come down. Labour industries, farmers, agriculture, and health sectors will benefit,ā she said.
The changes will make 175 mass-consumption items cheaper. Goods like milk, paneer, snacks, and bread will cost less. Items such as hair oil, toilet soaps, shampoos, toothbrushes, tableware, and kitchenware will now have only 5% GST.
Some products like UHT milk, paneer, chenna, and Indian breads will move from 5% GST to no tax. Spectacles will now have 5% GST.Ā Nearly 90 per cent of goods currently taxed at 28 per cent will shift to 18 per cent. This includes air-conditioning machines, televisions above 32 inches – with all TVs now under 18 per cent – dishwashing machines, cement, and small cars and motorcycles below 300 cc.
Automobiles such as small cars up to 350 cc, buses, trucks, ambulances and auto parts will also move to the 18 per cent slab