New Delhi : GST 2.0 rates came into effect on Monday as India launched its next-generation GST system, “GST Bachat Utsav.” The reform lowers taxes on around 370 products, including daily essentials and lifesaving medicines, making them more affordable for citizens.
Union Finance Minister Nirmala Sitharaman said the overhaul aims to inject about Rs 2 lakh crore into the economy by increasing consumers’ disposable income.
Over 50 items, including UHT milk, khakhras, pre-packaged paneer, and breads like chapatis and parathas, now fall under a zero-tax bracket.
The government exempted 33 essential drugs and therapies for conditions such as cancer and rare diseases from GST and reduced the tax on numerous other medicines from 12% to zero. Medical devices, including diagnostic kits and glucometers, now carry just a 5% GST.
The GST on stationery items for schools and offices, like erasers, pencils, notebooks, and maps, has been removed. Prices for consumer staples, including butter, biscuits, condensed milk, namkeen, jams, ketchup, juices, dry fruits, ghee, ice cream, and sausages, have dropped.
Dry fruits and nuts, such as almonds, cashews, pistachios, and dates, now attract 5% tax instead of 12%.
The government reduced GST on cement for housing from 28% to 18%. Services like haircuts, salon treatments, yoga classes, gyms, and health clubs also now face lower rates.
The zero-GST category now includes toiletries, such as soaps, shampoos, hair oil, face creams, and shaving cream.
GST on kitchen appliances and electronics, including air conditioners, TVs, washing machines, and dishwashers, has fallen from 28% to 18%.
To offset revenue losses, the government merged cess into the GST base and applied a 40% levy on sin and luxury goods.
Cigarettes, bidis, pan masala, gutka, and other tobacco products now face the highest tax rate, along with aerated beverages like Coca-Cola, Pepsi, and Fanta.
Large sport-utility and multipurpose vehicles exceeding 1,200 cc (petrol) or 1,500 cc (diesel) and measuring over 4 metres now attract 40% tax, up from the previous 28% plus 22% cess.
–IANS
