Business Desk – The GST Council, led by Finance Minister Nirmala Sitharaman, is meeting today to discuss major changes that could make many goods and services cheaper before the festive season.
Prime Minister Narendra Modi has hinted at a “Diwali gift” for traders in the form of GST reforms. The Council is likely to replace the current four-slab GST system (5%, 12%, 18%, 28%) with a simpler two-slab structure and reduce rates on several items.
Possible GST Rate Changes
Automobiles: Small cars, motorcycles under 350cc, and auto parts – 28% to 18%
Hospitality & Entertainment: Hotel stays and movie tickets – 12% to 5%
Healthcare: Cancer drugs – GST-free; other essential medicines – 12% to 5%; health and life insurance – GST-free
Daily-use Goods: Paneer, pizza bread, khakra, fruit juices, coconut water, butter, cheese, pasta, ice cream – 12% to 5% or exempt
Agriculture: Fertiliser inputs like sulphuric acid, nitric acid, ammonia – 18% to 5%
Textiles: Synthetic yarns, carpets, handicrafts – 12% to 5%
Green Energy: Solar cookers – 12% to 5%
Stationery: Erasers – exempt; notebooks, maps, charts – 12% to 5%
Toiletries: Toothpowder – 12% to 5%; toothpaste – 18% to 12%; shampoo, oil, soap – 18% to 5%
Other Items: Umbrellas – 12% to 5%; hotel rooms up to ₹7,500 – 12% to 5%
Special GST Rules
Luxury & Sin Goods: Tobacco, pan masala, luxury cars – 40% sin tax
Electric Vehicles: EVs priced ₹20–40 lakh – 5% to 18%; luxury EVs above ₹40 lakh – 40% sin tax
Coal: 5% to 18% (cess removed, but could increase electricity costs)
Apparel: Clothes above ₹2,500 – 12% to 18%
Experts believe these changes could boost spending, especially among middle-class households, and encourage private investment. The government expects a revenue loss of around ₹50,000 crore but hopes for higher market activity in return.
