Next-Gen GST to cut costs, boost economy

In a sweeping reform that promises to touch every household and business in India, the GST Council has unveiled the most ambitious overhaul of the Goods and Services Tax (GST) since its launch in 2017.

- STATESMAN NEWS SERVICE New Delhi, 4 September

Branded as the "Next-Gen GST," the new regime, which goes into effect from 22 September, collapses the complex multi-slab structure into a simpler two-rate system and slashes taxes across essentials, automobiles, housing, healthcare, education, and services.

The most significant shift comes in the form of a simplified two-slab structure of 5 per cent and 18 per cent, replacing the earlier four-slab system of 5, 12, 18, and 28 per cent.

To ensure revenue balance, luxury and 'sin' goods including tobacco, pan masala, aerated drinks, high-end cars, yachts, and private aircraft will be taxed at 40 per cent.

The reforms promise sweeping relief to households, businesses, and farmers through wide-ranging tax cuts and a simpler two-rate structure.

Everyday essentials such as soaps, shampoos, toothpaste, toothbrushes, and bicycles will now be taxed at 5 per cent, while UHT milk, paneer, and Indian breads have been moved to the zero-tax category.