GST Overhaul: A Festive Gift for India's Economy

In a landmark move, the GST council has announced a sweeping reduction in Goods and Services Tax rates, hailed by many as a substantial boost for the Indian economy. Delhi Minister Manjinder Singh Sirsa described the reform as a 'big gift' from Prime Minister Narendra Modi, just in time for Diwali. According to Sirsa, the changes, including the exemption of health and life insurance premiums, will primarily benefit the common people and strengthen economic growth.

The decision, unveiled by Finance Minister Nirmala Sitharaman, introduces a restructuring of GST rates by merging the existing 12% and 28% slabs into two primary rates: 5% and 18%. The 5% slab includes essential goods and services, such as food items, agricultural equipment, and health-related products. Meanwhile, the 18% category consolidates most consumer goods and professional services under a uniform tax rate.

The revised GST framework also maintains a 40% slab for luxury and sin goods, such as tobacco products and high-end vehicles. Crucially, educational and certain healthcare services remain GST-exempt. The reforms are envisioned to offer financial relief across various sectors, enhancing household savings and industrial growth ahead of the festive season.

(With inputs from agencies.)