The government has reduced GST rates on approximately 375 goods and services. The new rates came into effect at 12 midnight on Sunday. Price reductions on everything from two-wheelers to cars will begin on the first day of Navratri, as already announced by automobile companies.
The lower-middle class, farmers, and entrepreneurs will begin to benefit from the GST rate cut starting Monday. This will make prices cheaper for approximately 375 items, ranging from kitchen utensils to electronics, medicines and appliances to vehicles. Meanwhile, the process of registering for GST and receiving refunds will be simplified for entrepreneurs, especially small ones.
The government has reduced GST rates on approximately 375 goods and services. The new rates came into effect at 12 midnight on Sunday. Price reductions on everything from two-wheelers to cars will begin on the first day of Navratri, as already announced by automobile companies.
Meanwhile, companies have already announced price reductions on everything from water bottles to milk. This is expected to spur significant shopping during the festive season. The GST department has made extensive arrangements to ensure that people benefit from the GST rate reductions.
1. Dal and roti will be cheaper
Packaged food items like flour, rice, pulses, biscuits, and snacks previously attracted a 12% or 18% GST. Now, these have been reduced to a 5% tax slab. This could save a family of four an average of ₹1,800 per month and up to ₹40,000 annually.
2. Save money from soap to shampoo
Everyday items like soap, oil, toothpaste, detergent, and shampoo, which previously attracted an 18% tax, will now be taxed at 5%. If a family spent ₹1,000 a month on these items, they previously had to pay ₹180 in taxes. Under the new rate, they will only pay ₹50 in taxes, resulting in a savings of approximately ₹130. This change will reduce the burden on household expenses.
3. Clothes and shoes will fit into people’s budgets
Previously, readymade garments and shoes priced above a certain threshold were subject to a GST rate of 12% to 18%. Now, this tax has been reduced to 5%. If a family purchased clothing and shoes worth five thousand rupees a month, they would have to pay ₹900 in taxes at the 18% rate. Under the new rates, only ₹250 will be taxed. This change will result in savings of approximately ₹650.
4. Save thousands on TV, AC, and refrigerator
TVs, ACs, refrigerators, and other large electronics were previously subject to a 28% GST. Under the new system, these will only be taxed at 18%. This will reduce the prices of TVs with screen sizes over 32 inches by between ₹2,500 and ₹85,000.
Window AC prices will be reduced by up to ₹4,500, and split inverter ACs by up to ₹5,900. Tower AC prices have been cut by ₹8,550 to ₹12,450.
5. Relief for patients due to reduction in the price of medicines
Thirty-three life-saving drugs used to treat cancer and other serious illnesses have now been completely exempted from tax. Previously, these drugs were subject to a 12% GST. Additionally, three other specialized life-saving drugs have been exempted from the 5% tax and placed under the zero-rate tax bracket. Furthermore, glucometers and test strips have been made cheaper for people with diabetes.
6. Insurance policies will be cheaper
The decision to reduce GST on life and health insurance from 18% to zero is expected to increase the number of people taking insurance. Life insurance, which is typically an individual policy, accounts for the largest share of the Indian insurance market.
This reduction will now encourage more people to take out life and health insurance. The insurance sector has long been demanding tax cuts.
7. Your dream of buying a car will come true
Vehicles like bikes and cars previously faced a 28% tax. Now, they will be taxed at 18%. This will reduce the prices of two-wheeled vehicles, including motorcycles and scooters, by 15,000 to 20,000 rupees.
Prices of small and hatchback cars have been reduced by ₹70,000 to ₹150,000. Premium SUVs have seen a price cut of ₹125,000 to ₹250,000. Luxury vehicles will see a price reduction of ₹350,000 to ₹305,000.
