The Indian government is planning to restructure the Goods and Services Tax slabs in a major move that could provide substantial relief to middle and lower-income groups. The key proposal under discussion is to either reduce GST on essential items from 12% to 5% or remove the 12% slab entirely.
Relief For The Common Man
According to reports, most of the items under the 12% GST bracket are considered daily-use goods heavily consumed by the middle class and the economically weaker sections. By reducing the GST to 5% on these items, the government aims to:
- Lower prices of essential goods
- Ease inflationary pressure
- Increase household affordability
Alternatively, scrapping the 12% slab and redistributing items into the 5% or 18% categories is also being considered.
Items That Can Become Cheaper
| Item | Current GST | Proposed GST |
|---|---|---|
| Toothpaste, Tooth powder | 12% | 5% |
| Sanitary napkins | 12% | 5% |
| Umbrellas | 12% | 5% |
| Sewing machines | 12% | 5% |
| Pressure cookers, kitchen utensils | 12% | 5% |
| Electric irons | 12% | 5% |
| Geysers | 12% | 5% |
| Small-capacity washing machines | 12% | 5% |
| Bicycles | 12% | 5% |
| Readymade garments (over ₹1,000) | 12% | 5% |
| Footwear (₹500–1,000) | 12% | 5% |
| Stationery items | 12% | 5% |
| Vaccines | 12% | 5% |
| Ceramic tiles | 12% | 5% |
| Agricultural tools | 12% | 5% |
| Condensed milk, butter, cheese | 12% | 5% |
| Nuts and dried dates | 12% | 5% |
| Tableware and kitchenware of wood | 12% | 5% |
| Building bricks | 12% | 5% |
| Handbags and shopping bags (cotton/jute) | 12% | 5% |
| Idols of wood, stone, and non-precious metals | 12% | 5% |
| Rubber bands | 12% | 5% |
| Packed and labelled tender coconut water | 12% | 5% |
| Diabetic foods | 12% | 5% |
| Packed drinking water (20L bottles) | 12% | 5% |
What Does This Mean?
This major decision will impact your monthly household expenses. Essential items like sanitary pads, pressure cookers, and other things that we regularly buy will now be cheaper. For families already struggling with rising prices, the reduction in GST will provide immediate relief.
Economic Significance
Here comes the crucial time—an election year—where economic relief can play a vital role. The GST restructuring is seen as a measure to:
- Improve public sentiment
- Address rising concerns
- Position the government as pro-middle class
It would also be the most significant overhaul of GST rates since the tax system was implemented in 2017.
The GST Council, chaired by the Union Finance Minister and comprising the state finance ministers, holds the authority to recommend changes to the tax structure. The 56th meeting of the council is expected later this month, with 15 days’ advance notice required as per protocol.
The council’s decision will be crucial in determining:
- Whether the 12% slab will be retained
- Which items will move to the 5% bracket
- Whether any goods are shifted to higher slabs, like 18%
Real Impact In Households And Markets
If approved, the proposal would:
- Make essential goods more affordable
- Increase the purchasing power of the consumer
- Potentially boost market demand for these goods
This tax reform could become a centrepiece of both economic and electoral policies—not only because it would bring material relief to millions of Indian families, but also because it would reset the Indian system of indirect taxes.
When Will This Occur?
The GST Council is meeting later this month. If the proposal is accepted by the Council, the changes will be implemented nationwide. This implies that consumers may realize price reductions in these 25 basic goods within a few months.
This is a major policy change, and it might place more money in the hands of the common Indian people. Some of the necessities that families will be able to afford more of include school supplies, clothes, and home purchases, as these and other items tend to become more affordable.
The fact that the government has prioritised lowering taxes on essential items implies that it realises the ordinary citizen is in need of price relief. The possibility of this proposal being accepted will lie in the decision of the GST Council in the next meeting.
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