The central government has introduced major changes to the Goods and Services Tax (GST) structure. In its very first meeting on Wednesday, the GST Council approved the new framework, announced by Finance Minister Nirmala Sitharaman. From now on, only two standard rates will be applicable—5% and 18%. The 12% and 28% slabs have been removed, while a special 40% rate has been introduced for certain luxury goods.
Items Getting Cheaper:
- Food products: GST completely removed from milk, paneer, cheese curd, roti, and bread.
- Dairy and fruits: Butter, ghee, oil, cheese, nuts, dates, pineapple, avocado, guava, mango—slab reduced from 12% to 5%.
- Processed foods: Sausages, cooked meat/fish, sugar, pasta, noodles, vegetables—reduced from 12% to 5%.
- Other food items: Jam, jelly, coconut water, bhujiya, 20-litre water bottles—12% to 5%.
- Sweets & confectionery: Honey, candy, chocolate, cornflakes, cakes, pastries, soups, ice cream—18% to 5%.
- Insurance services: Life and health insurance exempted from GST.
- Beedis (excluding tobacco products): Beedi leaves reduced from 18% to 5%, beedis from 28% to 18%.
- Chemicals: Sulphuric acid, nitric acid, ammonia—5%.
- Electronics & vehicles: TVs, ACs, small cars, bikes below 350cc—18%.
Items Getting Costlier:
- Luxury vehicles: Premium cars, private jets, racing cars, large motorcycles—40%.
- Tobacco products: Cigarettes, cigars, tobacco items—40%.
- Pan masala & beverages: Pan masala, sugar-sweetened drinks, carbonated beverages—40%.
- Fuel: GST on coal raised from 5% to 18%.
The new rates will come into effect from September 22.