New Delhi: The Goods and Services Tax (GST) reforms came into effect on September 22, bringing significant changes in prices of daily-use items, vehicles, insurance, and consumer goods. The move, announced by the Union government as a “major rationalisation,” has reduced taxes on most essentials while raising rates on a handful of luxury and sin goods.
According to official estimates, households can expect up to 13% savings on grocery and essential bills. Food products such as ghee, paneer, butter, cheese, chocolates, and ice cream have become cheaper due to tax cuts. One litre of ghee, for example, now costs about ₹610 instead of ₹650. Medicines, including life-saving drugs, are either tax-free or taxed at just 5%, offering relief to patients. Insurance premiums for health and life policies are now GST-free, cutting costs by nearly 18%.
The automobile sector is also seeing benefits. Buyers of small cars may save around ₹70,000, while two-wheeler buyers can save about ₹8,000. GST on agricultural equipment and tractors has been reduced to 5%, leading to savings of up to ₹40,000 for farmers. Electronics such as televisions, air conditioners, inverters, and solar solutions have also seen price drops.
However, some items have become costlier. Coal has moved from the 5% to the 18% slab, though a cess of ₹400 per tonne has been withdrawn. Luxury and sin goods, including tobacco, cigarettes, pan masala, and online gaming, are now taxed at 40%, up from 28%.
Critics argue that while the reforms bring relief, they come late. The BJP government had imposed GST in 2017, a move that many small businesses and traders said caused disruptions and financial strain. For eight years, people bore the brunt of complex slabs and higher costs on essential goods. Economists also warn that while consumers may see short-term benefits, structural imbalances in sectors like trade and manufacturing remain unaddressed.
Opposition leaders have called the reforms “an election-year concession” rather than a structural correction. Analysts say the decision, though welcome, highlights how delayed course correction has prolonged the hardship for households and businesses. For now, people will experience cheaper essentials, but questions remain over why relief came so late.