GST Rate Reduction Takes Effect Monday, Consumers to Benefit from Lower Prices
Tax reduction on 375 items, from daily essentials to automobiles and medical devices, to benefit consumers across India.
New Delhi, Sep 21: Consumers across India will get a breather as prices of everyday items, electronics, medicines, and even automobiles are set to decrease from Monday, September 22, following the implementation of reduced GST rates on approximately 375 goods and services.
The GST Council, comprising representatives from the Centre and states, approved the tax rationalisation ahead of Navaratri. Key consumables like ghee, paneer, butter, snacks, ketchup, jam, dry fruits, coffee, and ice cream, as well as aspirational products such as TVs, air conditioners, and washing machines, will see price drops.
Medical devices including glucometers and diagnostic kits, along with most drugs and formulations, will now attract just 5% GST, bringing down costs for the common man. Homebuyers will benefit from the reduction of GST on cement from 28% to 18%. Pharmacies have been directed to revise MRPs to reflect the tax cut.
Automobile buyers are among the biggest beneficiaries, with GST rates cut to 18% for small cars and 28% for larger vehicles. Several car manufacturers have already announced price reductions.
Services related to health, beauty, and fitness including health clubs, salons, gyms, barbers, and yoga centers — will see GST reduced from 18% with Input Tax Credit (ITC) to 5% without ITC. Daily use products like hair oil, soap, shampoo, toothpaste, toothbrushes, talcum powder, face powder, and shaving cream are also set to become more affordable.
From September 22, the GST structure will be simplified to a two-tier system for most goods and services: 5% and 18%, while ultra-luxury items will attract 40%, and tobacco and related products remain in the 28% plus cess category.
Currently, GST is levied in four slabs 5%, 12%, 18%, and 28% with compensation cess on luxury and demerit goods. Finance Minister Nirmala Sitharaman has stated that the reforms are expected to inject Rs 2 lakh crore into the economy, giving consumers more disposable income. About 99% of goods under the 12% slab will move to 5%, while 90% of items in the 28% category will shift to 18%.
This comprehensive GST rationalisation is expected to make a tangible difference in consumer spending, boosting affordability across multiple sectors.
