Relief for the Common Man

• The GST rate on daily used items like hair oil, soaps, shampoos, toothbrushes, bicycles, and kitchenware is to be reduced from 12% or 18% to 5%.
• The essential food products, like UHT milk, paneer, and Indian breads (roti and paratha), have Nil GST.
• Packaged food items like bhujia, sauces, noodles, chocolates, and coffee are to be taxed at 5% GST.
• Cutting GST on 33 lifesaving drugs and medicines from 12% to Nil. Additionally, it is also recommended to cut the GST rate on 3 lifesaving drugs and medicines that are used in the treatment of cancer, rare diseases and other chronic diseases from 5% to NIL.
• GST on Air-conditioning machines, televisions (32 inches), Dishwashing machines, Small cars, and Motorcycles (equal to or less than 350 CC), to be reduced from 28% to 18%.

GST Exemption on Health Insurance Policies

• All health and Life Insurance Policies (including family floater policies and policies for senior citizens) are to be made GST-exempt.
• The council has recommended exempting GST on individual life insurance policies like term life, ULIPs, and endowment plans and their reinsurance.

GST Rate Reduction on Agricultural Goods

• The GST is to be reduced from 12% to 5% on tractors, agricultural machinery, horticultural or forestry machinery for soil preparation or cultivation, harvesting or threshing machinery, including straw or fodder balers, grass or hay mowers, composting machines, etc.
• Major correction of inverted duty structure for the manmade textile sector by cutting GST rates on manmade fibre from 18% to 5% and manmade yarn from 12% to 5%.

When Will the Changes be Implemented?

The GST council in the GST meeting decided to levy GST on the Retail Sale Price (RSP) and not on the transaction value of Pan Masala, Gutkha, Cigarettes, and Unmanufactured tobacco, Chewing tobacco as Zarda.

The GST Council has recommended that the revised GST rates on services and on most goods (excluding pan masala, gutkha, cigarettes, and other tobacco products) will be implemented from 22nd September 2025. The tobacco products will continue at the current GST rates until the loan and interest payment dues under the compensation cess are cleared. The actual date for the rate change on these items will be decided later by the Finance Minister.