New Delhi: In what comes as great news for the common person, the central government has announced a historic cut in the Goods and Services Tax (GST) rates just ahead of the festive season, which will now make most household items cheaper. Announcing this in Chennai today, Finance Minister Nirmala Sitharaman said that this reform is a “major victory for every citizen.”
Nearly All Items in 12% Slab Moved to 5%
Speaking at a conference in Chennai on “Tax Reforms for an Emerging India,” the Finance Minister stated that the decision was taken following the recommendations of the GST Council. Under this major overhaul, 99 percent of the goods that previously attracted a 12% GST rate have now been moved to the lower 5% slab. This move by the government will directly reduce the tax burden on consumers and increase their savings. These new rates will be effective nationwide from September 22, coinciding with the first day of Navratri.
According to a report by The Economic Times, this move is expected to significantly boost demand in the FMCG (Fast-Moving Consumer Goods) sector. The report, citing experts, mentioned that the tax reduction will benefit companies producing items like soap, toothpaste, packaged foods, and other household goods, allowing them to pass on the cost benefits to customers through lower prices.
A Pre-Festive Gift from the Government
“Prime Minister Narendra Modi had instructed that these reforms be implemented before Diwali, but we decided to advance it further and implement them from Navratri itself,” said Finance Minister Sitharaman. She emphasized that the impact of GST is felt on items used in every citizen’s daily life, “from the moment they wake up until they go to sleep at night,” and the aim of these reforms is to make this daily life easier.
What Could Get Cheaper?
While a detailed list of items will be released by the government soon, this announcement makes it almost certain that many products previously in the 12% tax slab—such as packaged food items, ghee, butter, certain types of apparel, footwear, agricultural equipment, and mobile phones—could become cheaper. This decision is not only expected to provide relief from inflation to the common person but also to give a new impetus to the country’s economy by boosting market consumption. The industry has also welcomed this move by the government.
