GST Overhaul: Big Savings on Everyday Goods and Services

The GST Council approved a major reform of the Goods and Services Tax system, reducing tax slabs from four to two, at 5 percent and 18 percent. Common goods, insurance policies, and consumer electronics will see lower taxes. This move aims to boost consumption amid Indo-US trade tensions.

In a significant move that could reshape consumer spending, the GST Council has endorsed an extensive reform of the Goods and Services Tax framework, simplifying it into two main tax slabs of 5 percent and 18 percent. This decision aims to make common goods more affordable and stimulate economic activity.

Among the array of items set for tax relief are everyday essentials like roti, paratha, and hair oil, as well as consumer electronics, effectively lowering their purchase cost. Additionally, health and life insurance policies will benefit from a zero tax rate, boosting insurance coverage across the nation.

Finance Minister Nirmala Sitharaman confirmed the unanimous agreement among states, and economists suggest that these changes could enhance India's GDP by 0.5 percentage points, counteracting the economic strain from increased US tariffs.

(With inputs from agencies.)