New Delhi: From September 22, the government’s major decision on Goods and Services Tax (GST) will bring relief to millions of people. The 12 percent and 28 per cent tax slabs have been scrapped, with products now shifted to 5 per cent and 18 percent categories. Additionally, several essential goods have been moved into the zero percent slab, effectively making them GST-free. Luxury items and sin goods such as pan masala and tobacco, however, will continue to attract a higher 40 percent levy.
Goods That Become GST-Free
Many daily-use items will no longer attract GST from September 22. These include paneer and chhena, ultra-high temperature (UHT) milk, pizza bread, khakhra, chapati, paratha, kulcha, and other breads. Personal health and life insurance premiums will also be exempt from GST. Among medical items, 33 life-saving drugs, medical-grade oxygen, as well as stationery items like sharpeners, crayons, pastels, notebooks, pencils, and erasers have all been brought under the 0 per cent tax slab.
Impact on Automobiles
The auto sector is set to witness a significant price correction following this restructuring. GST on small cars and bikes, earlier at 28 percent, has now been cut to 18 percent. This change will apply to motorcycles with engine capacity up to 350 cc and cars up to 1200 cc. As a result, prices of most small cars and two-wheelers are expected to fall, offering direct relief to buyers.
