New Delhi, 5th Sept 2025: In a historic decision, the GST Council has restructured the GST slabs, aimed at reducing the financial burden on farmers, the middle class, and the general public.
Key GST Slab Changes:
- Only 5Percent and 18Percent GST slabs retained
- 12Percent and 28Percent slabs eliminated
- A new 40Percent GST slab introduced for:
- Harmful products (e.g., tobacco, pan masala, cigarettes)
- Ultra-luxury goods
- Effective from: Navratri (22 September 2025)
Items Getting Cheaper:
- Milk, paneer, chhena
- Bread, paratha, biscuits, buns
- Stationery: pencils, sharpeners, erasers, notebooks, pens, maps, charts
- Educational tools like globes and exam pads
- Sewing machines & spare parts
- Baby essentials: feeding bottles, diapers
- Essential items: hair oil, shampoo, toothpaste, bath soap
- Health devices: glucometers, thermometers, medical diagnostic kits, eye testing tools
- Agricultural & horticultural tools, micro-irrigation systems
- 33 Life-saving Medicines are now GST-exempt.
Luxury & Harmful Items to Cost More:
- Pan masala, cigarettes (still under 28% GST + compensation cess)
- Expensive petrol/diesel cars, hybrid cars, premium two-wheelers
- Fancy cosmetics, branded perfumes
- Packaged snacks, processed foods
Tax Relief on Insurance:
- Life insurance and health insurance premiums are now GST-free
Reactions:
Prime Minister Narendra Modi:
- This is a major reform I had committed during my Independence Day address. It will ease the burden on citizens and bring fairness to the taxation system.
Odisha Chief Minister Mohan Charan Majhi:
- This reform will benefit common people and boost compliance in businesses. It’s a welcome step towards economic relief for the masses.
Summary:
This major GST reform simplifies the tax structure, reduces tax on essential items, and increases it on harmful and luxury products. It is expected to bring relief to the public and promote fair economic practices across sectors.
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