Consumers across the country are set to get some relief in the prices of everyday items after the GST reforms comes into effect on Monday, September 22. The prices of food and beverages items will be significantly reduced, as the GST rate on some items has been brought down to zero. The will lead to major drop in the cost of certain essentials. The items that will see price drop include milk, yogurt, cheese, shampoo, and soap, along with ACs, TVs, and even bikes.
It is noteworthy that a big decision regarding GST was taken in the GST Council meeting held on September 3, in which two GST slabs of 12 percent and 28 percent were removed. Now, there are only two-slab structure (5% and 18%). The GST rate on many items has been reduced to zero, making sever items cheaper than earlier.
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What will get cheaper?
Products like paneer, ultra-high temperature (UHT) milk, pizza bread, khakhra, roti, and parathas will now attract 0% GST, making them accessible to all. Life insurance policies and 33 life-saving medicines are also included in the zero-tax category. Educational items such as sharpeners, crayons, pastels, notebooks, and pencils will also be tax-free. Meanwhile, everyday personal care items like hair oil, shampoo, soap, toothbrush, and shaving cream will now be taxed at just 5% instead of the earlier 18%, making them significantly cheaper.
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| Sector | Items/Services | Effect |
|---|---|---|
| Food & Household | Essentials like UHT milk, paneer, Indian breads | Tax-free; direct savings for households |
| Soaps, shampoos, toothbrushes, toothpaste | GST cut from 12% to 5%; cheaper daily essentials | |
| Packaged snacks, chocolates, coffee | GST reduced to 5%; more affordable packaged foods | |
| TVs (LCD/LED), ACs, dishwashers | GST cut from 28% to 18%; lower prices on electronics | |
| Housing & Construction | Cement, marble, granite, bricks, bamboo flooring | GST reduced (12%-28% to 5%-18%); cheaper building materials |
| Automobiles | Small cars, two-wheelers, buses, trucks | GST cut from 28% to 18%; more affordable vehicles |
| Agriculture | Tractors, harvesters, irrigation equipment | GST cut to 5%; cheaper farming machinery |
| Bio-pesticides, natural menthol | GST cut from 12% to 5%; affordable sustainable inputs | |
| Services | Hotel stays (up to ₹7,500), gyms, salons, yoga | GST cut to 5%; cheaper hospitality and wellness services |
| Textiles & Handicrafts | Man-made fibers, handicrafts, dolls, paintings | GST cut to 5%; boosted affordability and export potential |
| Education | Exercise books, pencils, geometry boxes | GST cut to 0% or 5%; cheaper learning materials |
| Medical | Life-saving drugs, spectacles, medical devices | GST cut to 0%-5%; better access to healthcare products |
| Insurance | Life and health insurance premiums | GST exempted; reduced cost of insurance policies |
Key Takeaways From Next-Gen GST Reforms
GST simplified to a two-slab structure (5% & 18%)
GST reforms cut taxes on household essentials (soaps, toothpaste, Indian breads) to 5% or Nil boosting affordability.
Life-saving drugs, medicines reduced from 12% to Nil or 5% making healthcare affordable.
Two-wheelers, small cars, TVs, ACs, cement cut from 28% to 18% bringing relief to middle-class.
Farm machinery, irrigation equipment cut from 12% to 5%, reducing farming costs.
Tobacco, pan masala, aerated drinks, and luxury goods taxed at 40.
Also Read: Will Amul pouch milk price change from September 22 due to GST 2.0? Here’s what company said