GST Reforms Explained: What Will Get Cheaper Under PM Modi’s Next-Gen Tax Overhaul? Check Full List

In an attempt to reduce tax burden across the nation, Prime Minister Narendra Modi has announced 'next-generation GST reforms' during his Independence Day speech on Friday.

PM Modi has hinted that GST reforms may be implemented by Diwali 2025 and people aware of the matter and developments on the GST front, said that goods which fall under the 12% GST slab may come under the 5% GST slab, while goods falling under the 28% GST slab may come under the 18% GST slab.

However, according to people aware of the matter, there would be an additional 40% GST slab for goods falling under the category of sin, which includes tobacco products like cigarettes and beer.

The ultimate beneficiary of the next generation GST reforms would be the consumer, since GST is a consumption-oriented tax, and ultimately the consumer would pay less due to the lower GST.

What Will Become Cheaper?

The GST reforms are said to make everyday essentials significantly more affordable - from groceries and medicines to televisions and washing machines. Agricultural equipment, bicycles, and even insurance and education services are set to become cheaper, delivering direct relief to households and farmers while boosting consumption across the economy.

According to people familiar with the matter, there would only be three GST slabs - 5%, 18%, and 40%. Nearly 99% of the goods which fall under the 12% GST slab would fall under the 18% GST slab.

Items such as condensed milk, dried fruits, frozen vegetables, sausages, pasta, jams, namkeens including bhujiya, tooth powder, feeding bottles, carpets, umbrellas, bicycles, utensils, furniture, pencils, handbags which are made using jute or cotton, and footwear under Rs 1,000, which are currently taxed at 12% could see rates drop to 5%.

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