New GST rates came into effect today. From medicines to toothpaste, the next-gen GST reforms will significantly reduce the prices of all major products used by the common man. Prime Minister Narendra Modi aptly described the reforms as Bachat Utsav (Savings Festival). This festival will enhance savings and make it easier for people to purchase their preferred items. PM Modi noted that the benefits of this savings festival will reach the poor, middle class, neo middle class, youth, farmers, women, shopkeepers, traders, and entrepreneurs alike. He highlighted that for decades, citizens and traders were entangled in a complex web of taxes—Octroi, Entry Tax, Sales Tax, Excise, VAT, and Service Tax—amounting to dozens of levies across the nation. The Prime Minister pointed out that transporting goods from one city to another required crossing multiple checkpoints, filling numerous forms, and navigating a maze of differing tax rules at every location. Modi highlighted that under the new structure, only 5% and 18% tax slabs will primarily remain. This, he remarked, means that almost every day-use item will become more affordable. He listed food items, medicines, soap, toothbrushes, toothpaste, health and life insurance among the many goods and services that will either be tax-free or attract only a 5% tax. The Prime Minister further noted that of the items previously taxed at 12%, 99%—virtually all—have now been brought under the 5% tax bracket. What stands out is the slashing of rates on medicines, particularly cancer drugs. India has been facing a cancer burden, and treatment has become costlier for the common man. There will be no GST on 33 lifesaving drugs and medicines. Plus, there will be no GST on three critical medicines for cancer, rare diseases, and severe chronic illnesses. Besides, the GST has been reduced from 18% to 5% on several medical apparatus and devices used in medical, surgical, dental, veterinary, and laboratory applications. Medical equipment and supplies such as gauze, bandages, diagnostic kits and reagents, glucometers, and other devices will attract only 5% GST instead of 12%. What marks a step closer to universal healthcare is exempting all health insurance from GST. GST on all individual health insurance policies (including family floater policies and senior citizen policies) as well as on reinsurance has been exempted. The move is aimed at making insurance more affordable and expanding coverage. The Prime Minister and his team deserve praise for such reforms, which will directly benefit the common man. The reforms will ease the pressure of the cost of living for the middle class, which is the backbone of the consumer economy. PM is right when he says that these reforms would accelerate India’s growth story, simplify business operations, attract greater investments, and ensure that every state participates equally in the nation’s development journey.
GST reforms
