The Government of India has announced a Next-Gen GST Reform, calling it a historic Diwali gift for the nation. With the goal of building an Aatmanirbhar Bharat and making life easier for citizens, this reform promises relief across multiple sectors—daily essentials, healthcare, education, agriculture, automobiles, and electronics.
From households to businesses, these reforms will bring tangible savings and growth opportunities, especially for MSMEs and small entrepreneurs. Let’s take a closer look at the key highlights of this new GST reform.
1. Save Big on Daily Essentials
Taxes on many everyday items have been reduced, ensuring direct savings for households.
Hair oil, shampoo, toothpaste, toilet soap, brushes, and shaving cream: 18% → 5%
Butter, ghee, cheese, dairy spreads: 12% → 5%
Pre-packaged namkeens, bhujia & mixtures: 12% → 5%
Utensils: 12% → 5%
Baby & clinical diapers: 12% → 5%
Sewing machines & parts: 12% → 5%
2. Relief in the Healthcare Sector
The healthcare sector has received major tax relaxations, making medical services and products more affordable.
Health & life insurance: 18% → Nil
Thermometers: 18% → 5%
Medical-grade oxygen: 12% → 5%
Diagnostic kits & reagents: 12% → 5%
Glucometers & test strips: 12% → 5%
Corrective spectacles: 12% → 5%
3. Affordable Education
To support students and the education sector, several items are now cheaper:
Maps, charts & globes: 12% → Nil
School bags & pencils: 12% → Nil
Exercise books & notebooks: 12% → Nil
Erasers: 5% → Nil
4. Uplifting Farmers & Agriculture
Farmers and the agriculture sector benefit from reduced taxes on key equipment and inputs:
Tractor tyres & parts: 18% → 5%
Tractors: 12% → 5%
Bio-pesticides & micro-nutrients: 12% → 5%
Drip irrigation systems & sprinklers: 12% → 5%
Agri, horticulture & forestry machines: 18% → 5%
5. Automobiles Made Affordable
The automobile sector has also seen major reductions, making vehicles more accessible:
Petrol, LPG, CNG hybrid cars (up to 1200 cc & 4000 mm): 28% → 18%
Diesel & hybrid cars (up to 1500 cc & 4000 mm): 28% → 18%
3-wheeled vehicles: 28% → 18%
Motorcycles (up to 350 cc): 28% → 18%
Goods transport vehicles: 28% → 18%
6. Save on Electronic Appliances
Households will also save on popular appliances:
Air conditioners: 28% → 18%
Televisions (above 32”, including LED & LCD TVs): 28% → 18%
Monitors & projectors: 28% → 18%
Dishwashing machines: 28% → 18%
7. Process Reforms for Businesses
The GST reform isn’t just about rate cuts—it also makes processes easier for businesses:
Faster registration: Approval within 3 working days, based on data analysis.
Simplified refunds: Provisional refunds sanctioned after system-based risk evaluation.
Support for MSMEs: Easier compliance for businesses with a turnover of less than ₹2.5 lakh per month.
A Word from the Prime Minister
Prime Minister Narendra Modi described this as a gift for every Indian this Diwali. With taxes substantially reduced for the general public, MSMEs, and small entrepreneurs, the reform is expected to make daily essentials cheaper, boost savings, and energize the economy.
In Conclusion
The Next-Gen GST Reform is a major step towards “Better & Simpler GST”, ensuring affordability, boosting business confidence, and driving economic growth. From households to farmers, students to entrepreneurs, this reform brings happiness for all.