GST reform price cuts: Prime Minister Narendra Modi used his Independence Day speech at the Red Fort to give people big news. He said that the government will soon bring new changes to the Goods and Services Tax, and he called it a Diwali gift for the country. Modi told everyone that the new GST system will be much easier and lighter, so people will not feel too much tax pressure.
He added, “This Diwali, I am going to make it a double Diwali for you. The citizens will receive a big gift… We are bringing next-generation GST reforms. This will reduce the tax burden across the country. This will be a gift ahead of Diwali.”
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Here is what the New GST Will Look Like
- 12 per cent – for standard goods
- 18 per cent – for electronics and services
- 28 per cent – for luxury and sin goods
Right now GST has four main slabs, but the government wants to cut that down. The plan is to keep only two big rates, 5% and 18%. This means the 12% slab and the 28% slab will go away. Many products that used to be in the 12% category will move down to 5 percent, while most items from the 28% list will shift to 18%. Only a few luxury items like tobacco will have a much higher rate of 40%. Online gaming is also expected to come under this top tax rate, since it will be treated as a demerit category.
The Centre has already shared this plan with the group of state finance ministers. They will study it and later present it to the GST Council, which is likely to meet next month.
The government collects most of its GST money from the 18 percent slab. This rate alone gives almost 65% of the revenue. The 28% slab gives around 11%, while the 12% slab adds 5% and the 5% slab brings in 7%.
Modi also reminded people of how important self-reliance is for the country. He said Independence Day is like “a festival of 1.4 billion resolutions” and explained that the Constitution has guided India like a lighthouse for 75 years.
While talking about Atmanirbharta, he explained, “Atmanirbharta is not restricted solely to the rupee, pound, or dollar. It is related to our capabilities. Made-in-India worked so well that the enemy did not even realise what was destroying them. Imagine, had we not been Atmanirbhar, could we have executed Operation Sindoor as smoothly?”
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What will become cheaper?
- Tooth powder, toothpaste, soaps, hair oil
- Processed foods, snacks, frozen vegetables, condensed milk
- Mobiles, computers, sewing machines, pressure cookers, geysers
- Water filters (non-electric), irons, vacuum cleaners
- Ready-made garments above ₹1,000, footwear in ₹500–₹1,000 range
- Most vaccines, HIV/TB diagnostic kits, Ayurvedic medicines
- Bicycles, non-kerosene stoves, barbecues, cookware, utensils
- Exercise books, geometry boxes, maps, globes
- Glazed tiles, pre-fabricated buildings, vending machines
- Public transport vehicles (sold, not fares), agricultural machinery
- Solar water heaters
Items to get cheaper in 18% slab
- Insurance (in some cases may drop to 0 per cent)
- Cement, ready-mix concrete
- TVs, refrigerators, washing machines, ACs
- Car and motorcycle seats, railway AC units
- Aerated water, dishwashers, aircraft for personal use
- Protein concentrates, sugar syrups, coffee concentrates
- Plastic products, rubber tyres, aluminium foil, tempered glass
- Printers, razors, manicure kits, dental floss
