GST Rate Cut From September 22: Everyday Goods and Services to Get Cheaper

Starting September 22, consumers all over India will witness a major price drop for several essentials, household items, and even gifts of automobiles, as the new rates for GST will come into effect. The timing was not lost upon the government, which called the festival manoeuvre a "bonanza" for the common man.

The government had earlier this month proposed the raffle and shared it with the GST Council for its nod. From tomorrow onward GST rates on around 375 items will be pared down, thereby making food products and household items fairly cheaper.

🛒 What Gets Cheaper?

• Mass consumption items: ghee, paneer, butter, namkeen, ketchup, jam, dry fruits, coffee, and ice cream.
• Electronics & appliances: televisions, air conditioners, refrigerators, and washing machines.
• Daily-use essentials: hair oil, soaps, shampoos, toothbrushes, toothpaste, talcum powder, shaving cream, and aftershave lotion.
• On the healthcare front, medicines, formulations, glucometers, and diagnostic kits will now attract a 5% GST.
• In the housing area, cement that was earlier attracting 28% GST will now be brought down to 18%.
• In automobiles, small cars will be taxed at 18% whereas big cars at 28%; several carmakers have already announced price cuts.
• Beauty and wellness services of salons, gyms, yoga centres, and health clubs will now attract 5% tax (without ITC), a decrease from 18%.

📊 The New GST Structure

The rejig has streamlined GST by consolidating most items into a two-tier classification:

• 5% and 18% for most goods.
• 40% for ultra-luxury items.
• 28% + cess for tobacco and sin products.
• This will therefore end the four-slab system of 5%, 12%, 18%, and 28%.

💬 The Viewpoint of the Government

Describing the reforms as changes of the game, the Finance Minister reckoned that the putative cuts will be depositing ₹2 lakh crore in the economy, leaving consumers with more disposable income for spending.

"Roughly 99% of goods under the 12% slab are moving to the 5% slab, and perhaps 90% of items under 28% might be shifting to 18%," she said. "This shall benefit the households and businesses directly in their demand and growth."

✨ The GST 2.0 promises relief across the board for consumers from food to medicine, automobiles to daily essentials, also hoping to kickstart economic activity before the festive season.