"Revised GST Regulation: Significant Tax Reduction for Middle Class as Various Products Moved to Zero Percent Tax Bracket - Detailed List Inside"

The Council reorganized the four-tier tax structure into two main rates of 5% and 18%, thereby eliminating the 12% and 28% rates at their 56th meeting.

, and Administrator

2025 September 13 . 6:14 AM

2 min read

GST Modification Benefits Middle Class: Numerous Items Moved to 0% Tax Bracket - List Inside

"Revised GST Regulation: Significant Tax Reduction for Middle Class as Various Products Moved to Zero Percent Tax Bracket - Detailed List Inside"

Simplified GST Regime: A Boon for Citizens and Businesses

The Goods and Services Tax (GST) Council, in a significant move, approved reforms to simplify the tax regime and reduce the burden on citizens and businesses on September 3, 2020.

The reforms aim to address longstanding issues, including inverted duty structures and classification disputes. One of the key changes is the rationalization of the four-tier GST structure into two primary slabs of 5% and 18%, effectively abolishing the 12% and 28% categories.

For many essential items, the GST rates have been reduced or even eliminated. Thirty-three life-saving drugs, including cancer medicines, have been completely exempted from GST, cutting their rate from 12% to zero. Food products such as namkeens, pasta, instant noodles, coffee, and cornflakes have been moved to the 5% GST slab. Milk and milk products like UHT milk, chena, and paneer have been shifted to zero GST.

Education-related items such as maps, charts, globes, sharpeners, pencils, crayons, pastel colors, exercise books, notebooks, and erasers have been made GST-free. Personal care items such as hair oil, soaps, shampoos, and toothbrushes have been shifted to a 5% GST slab from 12-18%.

In the agriculture and renewable energy sectors, bio-pesticides, irrigation equipment, solar heaters, windmills, and photovoltaic cells have been moved into the 5% GST bracket. Rate cuts for labor-intensive sectors are intended to improve competitiveness.

However, so-called "sin and luxury goods" such as pan masala, cigarettes, aerated drinks, large motorcycles, luxury cars, private aircraft, and yachts will continue to attract the highest 40% GST rate. Larger vehicles in India will become more expensive from September 22 due to GST reforms, with a proposed new special tax rate of 40%, up from the current combined rate of up to 50% including GST and other levies.

The reforms also bring good news for insurance policies. Individual life insurance and health policies will no longer attract GST. Exemptions for health and life insurance policies are expected to make coverage more affordable. Erasers have been reduced from 5% to nil GST.

The GST Council's reforms are a step towards a more simplified and less burdensome tax regime for the citizens and businesses of India. With a focus on essential items, agriculture, education, and renewable energy, the changes aim to make life easier and more affordable for many.