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The GST Council, on Wednesday, September 3, approved historical changes to India's indirect tax structure — adopting a 5% and 18% tax structure — and several daily-use goods will become cheaper from September 22. From groceries and fertilisers to footwear, textiles, and even renewable energy, a broad basket of goods and services is set to become more affordable.
Items earlier taxed at 12% and 28% will now largely migrate to the other two slabs, making a wide range of products cheaper.
> Food and daily essentials Milk products: Ultra-high temperature (UHT) milk and paneer will now be tax-free (down from 5%), while condensed milk, butter, ghee, cheese and dairy spreads have moved from 12% to 5%.
> Staple foods: Malt, starches, pasta, cornflakes, biscuits, and even chocolates and cocoa products will see rates reduced from 12–18% to 5%.
> Dry fruits and nuts: Almonds, pistachios, hazelnuts, cashews, and dates, earlier taxed at 12%, will now attract just 5%.
> Sugar and confectionery: Refined sugar, sugar syrups, and confectionery items like toffees and candy have shifted to the 5% slab.
> Other packaged foods: Vegetable oils, animal fats, edible spreads, sausages, meat preparations, fish products, and malt extract-based packaged foods have been moved to the 5% slab.
> Namkeens, bhujia, mixture, chabena and similar edible preparations ready for consumption form (other than roasted gram), pre-packaged and labelled to go from 18% to 5%.
> Waters, including natural or artificial mineral waters and aerated waters, not containing added sugar or other sweetening matter, nor flavoured to move from 18% to 5%.
Agriculture and fertilisers: Fertilisers are down from 12-18% to 5%. Select agricultural inputs, including seeds and crop nutrients, have been rationalised from 12% to 5%.
> Healthcare Life-saving drugs, health-related products, and some medical devices have seen rate cuts from 12-18% to 5% or nil.
> Consumer goods Entry-level and mass-use items like select electrical appliances will move from 28% to 18%.
> Footwear and textiles have seen GST cut from 12% to 5%, reducing costs for mass-market products.
However, certain goods and services remain firmly under higher taxation.
> Pan masala, gutkha, cigarettes, chewing tobacco, zarda, unmanufactured tobacco, and bidi will continue under existing high GST rates and compensation cess until outstanding cess-linked loans are cleared. Additionally, the valuation of these products will now be shifted to Retail Sale Price (RSP) instead of transaction value, tightening compliance.
> All goods (including aerated waters), containing added sugar or other sweetening matter or flavoured to go from 28% to 40%.
> A new 40% slab for sin and luxury goods remains, ensuring that items like cigarettes, premium liquor, and high-end cars don’t see tax relief. Imported armoured luxury sedans will be exempt only in special cases, such as those brought in by the President’s Secretariat.