GST revamp: Council approves two tier slab system effective September 22; househod items get cheaper
PTC News Desk: Everyday essentials like hair oil, soap bars, shampoos, toothbrushes and more will now become cheaper, while GST on personal health and life insurance has been reduced to zero. This comes after the GST Council, chaired by Finance Minister Nirmala Sitharaman, approved a sweeping revamp of the tax system at its 56th meeting on Wednesday.
Under the new regime—effective from September 22—the existing four-tier GST structure will be simplified to just two slabs: 5% and 18%. Luxury and “sin” goods, however, will continue to face a special 40% tax. Branded as GST 2.0, the reform is aimed at easing compliance, cutting tax burdens, boosting consumption and improving the business climate. The government has projected a revenue impact of about ₹48,000 crore from the rate changes.
"Pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi will continue at the existing rates of GST and compensation cess where applicable, till loan and interest payment obligations under the compensation cess account are completely discharged," Sitharaman said.
The council has reduced GST on numerous household products from 12% or 18% down to 5%, covering items such as toothpaste, bicycles, kitchenware, tableware, shampoos and soap. Additionally, UHT milk, packaged paneer (chena), and all Indian breads—including roti, chapati, paratha and parotta—will now be completely exempt from GST, dropping from 5% to nil.
Several food products will also become more affordable, with GST on packaged snacks, bhujia, sauces, pasta, noodles, chocolates, coffee, preserved meat, cornflakes, butter and ghee slashed to 5%.
In a major relief for the auto and electronics industries, GST on items like air-conditioners, televisions, dishwashers, motorcycles (up to 350cc), small cars, buses, trucks, ambulances and three-wheelers has been lowered from 28% to 18%. Furthermore, all automobile parts will now uniformly attract 18% GST.
- With inputs from agencies
