GST reforms 2.0: From groceries to medicines, and electronics — here's what can get cheaper for you

Mint

7 hours ago

On India's 79th Independence Day this August 15th, the Union Finance Ministry announced that it plans to simplify and rationalise the existing goods and services tax (GST) regime. The Centre said its proposed reforms are aimed at simplifying tax structure into two slabs: 'standard' and 'merit', with the special rates being imposed 'only on a select few items'.
This was further confirmed and hailed by Prime Minister Narendra Modi during his speech at the Red Fort. On August 17, he added that the government has circulated the draft GST reforms among states and sought their cooperation to implement the proposal before Diwali.
The ministry added that it has sent the recommendations to the Group of Ministers (GoM) for further examination. After this, the GST Council will discuss and try to implement them 'early', to help citizens benefit from the changed tax slabs in the current financial year, it added
As of August 18, the effective GST rate slabs in India are 5 per cent, 12 per cent, 18 per cent, and 28 per cent, on most goods and services, except commodities such as gold and silver. Sources told Mint, that goods falling under the 12 per cent GST slab may come under the 5 per cent GST slab,
While goods falling under the 28 per cent GST slab may come under the 18 per cent GST slab.
They added that there would be an additional 40 per cent GST slab for goods falling under the category of sin, which includes tobacco products like cigarettes and beer.
As per the sources, the aim is to have only three GST slabs — 5 per cent, 18 per cent, and 40 per cent; with around 99 per cent of the goods currently under the 12 per cent slab, moving to the lower rate, and 99 per cent of the 28 per cent slab items dropping to the 18 per cent GST slab.
Since GST is a consumption-oriented tax, the ultimate beneficiary of the next generation GST reforms would be the consumer, who will pay less due to the lower GST. Sources said these GST reforms will make everyday essentials significantly more affordable — from groceries (food, fruits, vegetables), and medicines, to electronics (including ACs, TVs, fridges, washing machines).
Further, agricultural equipment, bicycles, and even insurance and education services are set to become cheaper, delivering direct relief to households and farmers while boosting consumption across the economy.
Notably, items currently taxed at 12 per cent include condensed milk, dried fruits, frozen vegetables, sausages, pasta, jams, namkeens including bhujiya, tooth powder, feeding bottles, carpets, umbrellas, bicycles, utensils, furniture, pencils, handbags made of jute or cotton, and footwear under ₹ 1,000. All these could see drop in prices if taken down to the 5 per cent slab.
1,000. All these could see drop in prices if taken down to the 5 per cent slab. According to a PTI report, there is no confirmation on how automobiles, which are currently in the highest tax bracket, would be charged in the revamped regime.