GST rate cut: The Goods and Services Tax (GST) reforms will take effect from September 22, with two tax slabs – 5 per cent and 18 per cent – and a special 40 per cent slab for sin goods. Earlier this month, the GST council, led by Finance Minister Nirmala Sitharaman, announced the reforms to simplify the slabs, boost consumption, and rationalise the rates.
---Advertisement---
Under the new plan, the government will combine the four GST slabs into two main categories and add a separate “sin tax” bracket.
---Advertisement---
- 5% slab – for essential goods.
- 18% slab – for most other goods and services.
- 40% slab – for luxury and sin goods such as tobacco, alcohol, betting, and online gaming.
The new rates are expected to lower prices on many items that currently attract 12% or 28% tax and make compliance easier.
GST rate cut: What May Get Cheaper for You
- Toothpaste, soaps, and shampoos.
- Packaged foods like biscuits, snacks, and juices.
- Dairy items such as ghee and condensed milk.
- Bicycles and stationery.
- Apparel and footwear below a certain price point.
- Large-screen televisions.
- Cement
- Household appliances & electronics, including air conditioners, refrigerators and dishwashers.
- Automobiles: small cars (engine size under 1,200cc), two-wheelers.
- Insurance and financial services.
GST 2.0: What remains costlier
- Tobacco products
- Alcohol
- Pan masala
- Online betting and gaming platforms
- Petroleum products are still outside GST, so fuel prices remain unchanged.
- Luxury items such as diamonds and precious stones are likely to keep higher tax rates.
---Advertisement---
