Prime Minister Narendra Modi has lauded the latest round of Goods and Services Tax (GST) reforms as a ‘double dose of support and growth’ that will accelerate India’s economic trajectory in the 21st century.
Speaking on Thursday, PM Modi said the reforms will improve citizens’ quality of life, boost consumption, and strengthen the ease of doing business.
Highlighting past high taxation under previous governments, PM Modi noted that items of daily use—such as kitchen staples, medicines, and farming tools—had previously been heavily taxed.
The new system addresses this imbalance and brings relief to households and industries alike.
The government has moved to a simplified two-slab system of 5% and 18%, eliminating the earlier 12% and 28% categories.
This makes compliance easier and taxation more transparent. Meanwhile, luxury goods such as pan masala, tobacco, yachts, and private aircraft will attract a 40% tax, maintaining fiscal balance.
The government has streamlined registration and return filing procedures, accelerated refunds, and reduced compliance costs—directly benefiting MSMEs and start-ups.
Support for Key Sectors
The reforms introduce significant savings for families. Essential food items such as UHT milk, packaged paneer, and Indian breads now carry a 0% GST rate.
Other daily use goods like soaps, shampoos, toothpaste, and bicycles fall under the 5% slab.
Electronics like ACs, dishwashers, and LED TVs have seen a rate cut from 28% to 18%, making them more affordable while supporting domestic manufacturing.
GST on cement has dropped from 28% to 18%, and on construction materials like marble and granite from 12% to 5%, delivering a strong boost to the housing sector.
In agriculture, farm equipment such as tractors, threshers, and irrigation tools now attract 5% GST, down from 12%.
The reduction in bio-pesticide and fertiliser input rates supports small farmers and furthers self-reliance in the sector.
Health, Education & Services See Relief
Healthcare costs will fall with 33 life-saving drugs and diagnostics now at 0% GST. Other medical and wellness services—such as Ayurveda and homoeopathy—have shifted to the 5% bracket.
The services sector also benefits: GST on hotels (under ₹7,500/day), gyms, salons, and yoga centres has been slashed from 18% to 5%.
In education, zero GST on school supplies like notebooks, pencils, and sharpeners will ease the burden on families.
Handicrafts and textiles also receive support, with lowered rates aimed at protecting artisan livelihoods and boosting exports.
By correcting inverted duty structures and enhancing affordability, the new GST regime paves the way for a more inclusive, growth-oriented economy.
As PM Modi emphasised, these reforms are not only pro-business but also profoundly pro-people—offering direct, measurable benefits to citizens across all segments of society.
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