A sweeping reset of rates, compliance and dispute resolution

India's 56th GST Council meeting approved a broad package of "strategic, principled, and citizen-centric" reforms that include rate cuts, structural simplifications and institutional upgrades.

- Manish Singhal

ical devices now attract 5%. Further, all individual life and health insurance policies, including reinsurance, are exempted, a measure expected to improve affordability and coverage. These steps are compassionate reforms that reduce treatment costs and directly benefit patients and their families, especially the middle class and economically weaker sections.

Essential consumption such as certain dairy items move to nil, while several packaged food items are lowered to 5%, adding breadth to the relief. In addition, GST on hotel accommodation priced at ₹7,500 or below per unit per day is reduced from 12% (with ITC) to 5% (without ITC), a cut designed to make mid-market stays more affordable and support international and intra-country tourism.

Critical sectors of the economy GST cuts promise broad economic benefits. Lowering cement to 18% and sand-lime bricks and stone inlay work to 5% reduces construction costs, accelerates infrastructure projects and boosts demand for steel. Bringing buses, trucks, ambulances and auto parts to 18% simplifies procurement, lowers maintenance and encourages fleet modernisation, strengthening logistics. For households, two-wheelers and small cars up to 350cc now taxed at 18% become more affordable, fuelling consumption, lifting mobility and supporting wider growth.