Major Announcement
Prime minister Narendra Modi announced the launch of “GST Bachat Utsav”, coinciding with the start of Navratri.
Revised Goods and services Tax (GST) rates take effect from september 22.
Combined with income tax exemptions up to ₹12 lakh, citizens are expected to save ₹2.5 lakh crore annually.
Significance of the Reforms
Modi termed the changes as Next-Generation GST reforms.
Symbolises a new phase for Aatmanirbhar Bharat (Self-Reliant India).
Described as a “celebration for all sections of society”, it benefits middle-class families, farmers, traders, shopkeepers, women, youth, and entrepreneurs.
Reforms aim to simplify business, boost investment, accelerate growth, and ensure equal development across states.
Income Tax Relief
The government exempted income up to ₹12 lakh from taxation.
Provides major relief to middle-class households.
Modi highlighted that both poor and middle-class families will receive a “double benefit” through tax and GST relief.
Combined savings from reforms expected to exceed ₹2.5 lakh crore in one year.
Impact on Poverty Alleviation
Modi noted 25 crore people have risen out of poverty in the last 11 years.
The neo-middle class is playing an increasing role in India’s growth story.
GST and tax reforms aim to strengthen the poor, the neo-middle class, and middle-class households.
New GST Rates (Effective september 22)
375 items see reduced GST rates.
Everyday staples: ghee, paneer, butter, namkeen, ketchup, jam, dry fruits, coffee, and ice cream will be cheaper.
Consumer durables: televisions, washing machines, and air conditioners are now taxed at lower rates.
Healthcare relief: GST on most drugs, formulations, and diagnostic equipment cut to 5%.
Construction sector: cement is now taxed at 18% instead of 28%.
Automobiles: small cars at 18%, large cars at 28%.
Daily-use products: shampoos, soaps, hair oil, toothpaste, now at 5% slab.
Services: salons, health clubs, fitness centres, and yoga sessions reduced to 5% (no input credit), down from 18%.
Economic Boost
Finance minister Nirmala Sitharaman stated the GST rationalisation will release ₹2 lakh crore into the economy, increasing consumer disposable income.
click and follow Indiaherald WhatsApp channel