Lower GST rates came into effect on Monday, resulting in slashing of prices of 375 items ranging from toothpaste and shampoo to cars and television sets. The move is aimed at boosting consumption to cushion an economy facing uncertainty due to US tariffs.
Tax rates of 5, 12, 18, and 28 per cent have been clubbed into two rates of 5 per cent and 18 per cent, resulting in a reduced price of 99 per cent of daily use items.
FMCG, car companies, electronics manufacturers and pharma companies have lowered prices. The 375 items whose prices have gone down also include agricultural equipment, clothing, medicines and automobiles.
Finance Minister Nirmala Sitharaman visited the Laxmi Nagar market in New Delhi and interacted with a stationery shop owner. "The shopkeeper said the GST rate cuts on many stationery items have been reduced, benefitting students and parents," the Finance Minister's Office said in a post on X.
Prime Minister Narendra Modi has termed the reform as “GST Bachat Utsav”. He said that, along with the income tax exemption hike to Rs 12 lakh announced in the Budget, the total household savings would come to Rs 2.5 lakh crore. "Your household expenses will reduce and it will be easier to fulfil aspirations such as building a home, purchasing a vehicle, purchasing appliances, eating out or planning a family vacation," the Prime Minister said in an open letter.
As per government estimates, there would be a saving of 13 per cent in the household bills for groceries and daily essentials, while a small car buyer could save around Rs 70,000.
Stationery, clothing, footwear and medicines purchases would bring in savings in the range of 7-12 per cent, while the savings would go up to 18 per cent in the case of individual health and life insurance policies, which have been exempted from GST.
There would be a savings of Rs 40,000 on the purchase of tractors up to 1,800 cc. GST rate has been cut to 5 per cent on tractors from the earlier 12-18 per cent.
In case of bikes/scooters (up to 350 cc) purchase, savings would be Rs 8,000, while in TV (above 32 inches), there would be savings of Rs 3,500. Air conditioner purchase would result in a saving of Rs 2,800 as the GST rate of these items has been slashed from 28 per cent to 18 per cent.
Meanwhile, Opposition-ruled states slammed the Centre for taking all "undue credit" for the GST rate cut, saying it is the states which will have to suffer revenue loss. West Bengal Chief Minister Mamata Banerjee on Monday accused the Centre of passing the financial burden to states after lowering GST and taking "undue credit" for it.
Karnataka Chief Minister Siddaramaiah accused Modi of "deceiving" Indians. "It was Modi who implemented GST, it was Modi who increased GST rates and now it is Modi who is patting himself on the back. We were the ones who opposed it when GST was increased to 18 per cent and 28 per cent. The very people who collected it all these years are now taking credit. See how cleverly they are deceiving Indians. You should not fall for this," Siddaramaiah said.
Also read: Farmers hail GST rate cuts on agri products as ‘Diwali gift’
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