New GST Rates Kick In Groceries, Medicines, Electronic Items, Cars Get Cheaper

New Delhi- New lower GST rates kicked in from Monday, resulting in a slashing of prices of as many as 375 items ranging from toothpaste and shampoo to cars and television sets, a move seen as an attempt to boost consumption to cushion an economy facing tariff headwinds.

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. As many as 375 items, including groceries, agri-equipment, clothing, medicines and automobiles, have got cheaper.

Finance Minister Nirmala Sitharaman visited the busy Laxmi Nagar market in the national capital and interacted with a stationery shop owner.

“The shopkeeper shared that Nex-Gen GST rate cuts on many stationery items have reduced prices, benefitting students and parents,” the Finance Minister's Office said in a X post.

Prime Minister Narendra Modi has termed the reform as 'GST Bachat Utsav' and said that, along with the Income Tax exemption hike to Rs 12 lakh announced in the Budget, the total household savings would be 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 exempt from GST.

There would be a savings of Rs 40,000 on the purchase of tractors up to 1800 cc. GST rate has been cut to 5 per cent on tractors from the earlier 12-18 per cent.

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