The Government of India on Monday implemented a major overhaul of the Goods and Services Tax (GST) regime, introducing a simplified two-tier tax system and revised rates for over 375 items, aimed at easing prices for consumers across the country.
Under the new GST structure, most goods and services will now be taxed at either 5 per cent or 18 per cent, replacing the previous four-slab system. A higher rate of 40 per cent will apply only to ultra-luxury items, sin goods, and other demerit products. Essential commodities such as food grains, medicines, and daily-use consumer goods remain in the 5 per cent bracket, maintaining affordability for the common man.
Several mid-range items will become cheaper following the removal of the 12 per cent slab. Products seeing a reduction in GST rates include ghee, butter, paneer, coffee, snacks, jams, ketchup, dry fruits, and ice cream. The government said the move is designed to provide financial relief to urban and semi-urban households, especially ahead of the festive season.
Prime Minister Narendra Modi, marking the launch, announced the start of a nationwide “GST Utsav” from the first day of Navratri, describing it as a “festival of savings.” Addressing the nation, he said: “Next-gen GST reforms are being implemented from tomorrow. From September 22, people will be able to buy their favourite items at lower prices. The poor and the new middle class are getting double benefits after the GST rate cuts.”
The Union Finance Ministry notified the revised Central GST (CGST) rates on September 18, with state governments issuing corresponding State GST (SGST) notifications. The combined effect of these changes comes into force today.
-IANS