New Delhi, September 21: Starting Monday, consumers can expect a drop in prices across a wide range of products—from everyday kitchen essentials to electronics, medicines, medical equipment, and automobiles—due to the implementation of reduced GST rates on approximately 375 items.
The GST Council, which includes representatives from both the central and state governments, has approved these tax cuts effective from September 22, coinciding with the beginning of Navaratri. This move is set to benefit consumers significantly.
Essential goods such as ghee, paneer, butter, snacks, ketchup, jam, dry fruits, coffee, and ice cream, along with high-demand items like televisions, air conditioners, and washing machines, will become more affordable. Several FMCG companies have already announced price reductions in response to the GST rationalization.
Medicines and medical devices, including glucometers and diagnostic kits, will see their GST rates lowered to 5%, making healthcare more accessible and affordable. Homebuyers will also gain from the reduction of GST on cement from 28% to 18%, potentially lowering construction costs.
Pharmacies have been instructed by the government to adjust their maximum retail prices (MRP) or sell medicines at reduced rates reflecting the GST cuts.
Automobile buyers stand to benefit the most, with GST rates slashed to 18% for small cars and 28% for larger vehicles. Several car manufacturers have already announced price cuts in anticipation of this change.
On the services front, GST on beauty and wellness services—including health clubs, salons, barbershops, fitness centers, and yoga classes—has been reduced from 18% with input tax credit (ITC) to 5% without ITC.
Daily-use personal care products such as hair oil, toilet soap bars, shampoos, toothbrushes, and toothpaste are also expected to become cheaper, as their GST rates have been lowered from 12-18% to 5%. Similarly, items like talcum powder, face powder, shaving cream, and after-shave lotion will see price reductions following a cut in GST from 18% to 5%.
From September 22 onwards, the GST structure will be simplified into two main slabs: 5% and 18% for most goods and services. Ultra-luxury items will attract a higher tax rate of 40%, while tobacco and related products will remain in the 28% plus cess category.
Currently, GST is applied in four slabs—5%, 12%, 18%, and 28%—along with a compensation cess on luxury and sin goods. Finance Minister Nirmala Sitharaman recently highlighted that these GST reforms are expected to inject Rs 2 lakh crore into the economy, effectively increasing disposable income for consumers by reducing their tax burden.
Approximately 99% of goods currently taxed at 12% will move to the 5% slab, and about 90% of items in the 28% category will be shifted to the 18% bracket, marking a significant tax rationalization. (AGENCIES)
