• The overhaul introduces a simpler and fairer tax regime aimed at boosting economic growth and easing compliance. These reforms are aligned with India’s long-term vision of becoming a developed nation by 2047.
• The Council reduced multiple GST slabs into three key rates. A standard rate of 18% applies broadly. A merit rate of 5% covers essential goods and services. A 40% de-merit rate targets select harmful products. This rationalisation cuts complexity and increases transparency. Businesses can now predict tax liabilities more easily. Consumers benefit from clearer pricing structures.
• Everyday items like soap, shampoo, toothpaste, bicycles, and kitchenware are taxed at 5%.
• Essentials such as Ultra-High Temperature milk, paneer, chapati, and paratha are exempt.
• Packaged foods, noodles, chocolates, and beverages have reduced rates, enhancing affordability.
• Life and health insurance products are now GST-exempt, making insurance more accessible.
• Health care costs fall due to exemptions on essential drugs, devices, and treatments for cancer and chronic diseases.