The
GST Council, chaired by Finance minister
Nirmala Sitharaman, is set to announce major changes in India’s tax structure. The much-discussed
‘Next-Gen’ GST reform aims to simplify the four-tier tax system into
just two slabs – 5% and 18%. While this could bring relief to the common man on daily essentials, some luxury and sin goods are likely to get costlier. Here’s a full breakdown.
1. What is ‘Next-Gen’ GST Reform?
The reform will
replace the existing 12% and 28% slabs, which were part of GST since July 2017, with
two simplified slabs: 5% and 18%.The goal is to
ease compliance, reduce tax burden on essentials, and make the tax system more transparent.
2. Items Likely to Get Cheaper
Daily Essentials & Food Items
Consumers can expect
lower GST rates on everyday goods:
Medicines and
healthcare productsGroceries: fruits, vegetables, and packaged food
Electronics: ACs, TVs, fridges, washing machines
Farming tools and
bicyclesInsurance and
educational servicesSpecially Reduced Goods
Some items may move from
12% to 5% GST:Condensed milk, tooth powder, dried fruits, frozen vegetablesSausages, pasta, jams, namkeens, and bhujiya
Daily Utility Items
Carpets, umbrellas, utensils, furniture, feeding bottlesPencils, handbags (jute/cotton), bicyclesFootwear priced under Rs 1,000The
reduced GST on these items is aimed at making basic necessities
more affordable for indian households.
3. Items Likely to Become Costlier
Luxury & Sin Goods
Certain products may data-face a
special 40% GST slab:High-end cars and luxury goodsAlcohol, coffee, soft drinks, sugar, and fast foodTobacco and gambling services
Fuel & Coal Products
Briquettes, coal, lignite, and peat-based products may see a
rise in prices due to higher GST.
Clothing & Apparel
Ready-made clothes costing more than
Rs 2,500 may move from
12% to 18%, making them slightly more expensive.
4. Impact on Consumers
Essentials and day-to-day items are
set to become cheaper, providing relief to households.
Luxury and sin goods will carry a higher tax, potentially
discouraging excessive consumption.Consumers may need to
plan purchases of high-end products and clothing accordingly.
5. Final Takeaway
The
Next-Gen GST reform balances
affordability and revenue collection. While it makes
essential goods more pocket-friendly, it ensures
luxury items and sin products contribute a higher share of taxes. Keep an eye on the official announcement to see the
final list of items and exact GST slabs.
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