• Source:JND
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GST Reform Explained: In a big move to give relief to people, the next-generation GST reforms, as announced by Prime Minister Narendra Modi from the ramparts of Red Fort on August 15, 2025, rolled out, representing a strategic, principled, and citizen-centric evolution of a landmark tax framework, which will enhance the quality of life of every last citizen. The GST Council approves reforms with a multi-sectoral and multi-thematic focus on improving the lives of all sections of people and ensuring ease of doing business for all, including small traders and businessmen. The GST Council approved rate rationalisation with a focus on Common man, Labour-intensive Industries, Farmers and Agriculture, Health, Key Drivers of the economy

The GST reform comes as a big relief for the common man, as the GST Council made major tax cuts on goods being used by the people at large. The announcement to reduce the taxes on the common man's goods will give much-needed relief from inflation. There was good news from the GST reform for students as well. The government decided to make several items used by students tax-free.

Will GST Reform Boost Indian Economy?

SO READ: Tobacco, Sugary Drinks, Luxury Goods: Full List Of Items Now Under 40% GST Slab

Relief For Farmers

The government announced reduction of GST from 12% to 5% on agricultural goods, such as tractors, agricultural, horticultural or forestry machinery for soil preparation or cultivation, harvesting or threshing machinery, including straw or fodder balers, grass or hay mowers, composting machines etc

ALSO READ: GST New Rates: Council Exempts Individual Life And Health Insurance Policies From Tax; Slashed To Zero

Big Relief For Students

Goods Reduced From 12% To Nil

Maps  and  hydrographic  or  similar  charts  of  all  kinds,  including  atlases,  wall  maps, topographical plans and globes, printed

Pencil sharpeners

Pencils (including propelling or sliding pencils), crayons, pastels, drawing charcoals and tailor’s chalk

Exercise book, graph book, & laboratory note book and notebooks

 

GST On Goods Reduced From 12% To 5% 

Mathematical boxes, geometry boxes and colour boxes

 

Goods Related To Common Man

GST On Goods Reduced From 12% To 5% 

Tooth powder

Candles, tapers and the like

All goods-safety matches

Feeding bottles

Nipples of feeding bottles

Hand bags and shopping bags, of cotton

Hand bags and shopping bags, of jute

Tableware and Kitchenware of wood

Umbrellas and sun umbrellas (including walking-stick umbrellas, garden umbrellas and similar umbrellas)

Parts, trimmings and accessories of articles of heading 6601 or 6602

Tableware, kitchenware, other household articles and toilet articles, of porcelain or china

Tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china

Sewing needles

Kerosene burners, kerosene stoves and wood burning stoves of iron or steel

Table, kitchen or other household articles of iron & steel; Utensils

Table, kitchen or other household articles of copper; Utensils

Brass Kerosene Pressure Stove

Table, kitchen or other household articles of aluminium; Utensils

 Sewing machines, other than book-sewing machine of heading 8440; furniture, bases and covers specially designed for sewing machines; sewing machines needles and parts of sewing machines

Bicycles and other cycles (including delivery tricycles), not motorised

Parts and accessories of bicycles and other cycles (including delivery tricycles), not motorised, of 8712

Furniture wholly made of bamboo, cane or rattan

Hurricane lanterns, Kerosene lamp / pressure lantern, petromax, glass chimney, and parts thereof

Combs, hair-slides and the like; hairpins, curling pins, curling grips, hair-curlers and the like, other than those of heading 8516, and parts thereof

 

Here Are The Other Key Highlights Of GST Reform

- Exemption of GST on all individual life insurance policies whether term life, ULIP or endowment policies and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country.

- Exemption of GST on all individual health insurance policies (including family floater policies and policies for senior citizens) and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country

- Rationalisation of the current 4-tiered tax rate structure into a citizen-friendly ‘Simple Tax’ - a 2 rate structure with a Standard Rate of 18% and a Merit Rate of 5%; a special de-merit rate of 40% for a select few goods and services

- Reduction of GST from 18% OR 12% to 5% on a host of common man items such as, hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste, Bicycles, Tableware, kitchenware, other household articles, et al

- Reduction of GST from 5% to NIL on Ultra-High Temperature (UHT) milk, Prepackaged and labelled chena or paneer; All the Indian Breads will see NIL rates (Chapati or roti, paratha, parotta, etc)

- Reduction of GST from 12% OR 18% to 5% on almost all of the food items such as packaged namkeens, Bhujia, Sauces, Pasta, Instant Noodles, Chocolates, Coffee, Preserved Meat, Cornflakes, Butter, Ghee, etc.

- Reduction of GST from 28% to 18% on Air-conditioning machines, TVs~32 inch (all TVs now at 18%), Dishwashing machines, Small cars, Motorcycles equal to or less than 350 CC

- Reduction of GST from 12% to 5% on labour intensive goods such as Handicrafts, Marble and travertine blocks, granite blocks, and Intermediate leather goods

- Reduction of GST from 28% to 18% on Cement

- Reduction of GST from 12% to NIL on 33 lifesaving drugs and medicines and from 5% to NIL on 3 lifesaving drugs & medicines used for treatment of cancer, rare diseases and other severe chronic diseases.

- Reduction of GST on all other drugs and medicines from 12% to 5%.

- Reduction of GST from 18% to 5% on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis

- Reduction of GST from 12% to 5% on various medical equipment and supplies devices such as wadding gauze, bandages, diagnostic kits and reagents, blood glucose monitoring system (Glucometer) medical devices, etc

- Reduction of GST from 28% to 18% on Small Cars and Motorcycles equal to or below 350cc

- Reduction of GST from 28% to 18% on buses, trucks, ambulances etc

- Uniform rate of 18% on all auto parts irrespective of their HS code; Three-Wheelers from 28% to 18%