GST overhaul relief on consumers, 375 items now cheaper, big-ticket savings up to Rs 70,000

India’s revamped Goods and Services Tax (GST) regime took effect on Monday, replacing the earlier four-tier structure of 5, 12, 18 and 28 per cent with a simplified two-slab system of 5 and 18 per cent, a shift expected to bring down consumer costs.

The new GST slabs will cut tax rates on about 375 items, leading to increased savings for the consumers.

Here’s what gets cheaper from Monday.

Mass-consumption and FMCG products have moved to the 5 per cent slab from higher rates. The government estimates a 13 per cent cut in household grocery bills.

Kitchen staples: Ghee, paneer, butter, coffee, ice cream, ketchup, jam, dry fruits

Personal care: Hair oil, soap, shampoo, toothbrush, toothpaste, talcum powder, shaving cream

Big-ticket items see substantial drops.

Estimated reduction:

Small Car: Rs 70,000

Motorcycle/Scooter (up to 350 cc): Rs 8,000

Air Conditioner: Rs 2,800

Television (>32 inches): Rs 3,500

Tractor (up to 1800 cc): Rs 40,000

Cement now attracts 18 per cent GST instead of 28 per cent, construction will come down by 3-5 per cent, reducing home prices for buyers by 1-1.15 per cent.

Essential healthcare items and services have become more affordable:

Insurance: Health and life policies are now GST-exempt, saving up to 18 per cent

Medicines & Devices: GST on most drugs and medical devices, like glucometers and diagnostic kits reduced to 5 per cent

Wellness Services: Health clubs, salons, and fitness centres now attract 5 per cent GST (without tax credit)

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 on Sunday called the move a "GST Bachat Utsav" (savings festival), saying it will be a "double bonanza" alongside the income tax exemption hike. According to the PM, the combined benefit will save households an estimated Rs 2.5 lakh crore annually.

Home minister Amit Shah said that the Next-Gen GST reforms are a testament to Prime Minister Narendra Modi's "steely resolve" to serve the poor, youth, farmers and women.

Meanwhile, Opposition-ruled states slammed the Centre for taking all "undue credit" for the GST rate cut, saying it is the states who will have to suffer revenue loss.

Bengal chief minister Mamata Banerjee on Monday accused the Centre of having passed the financial burden to states after lowering GST and taking "undue credit" for it.

"It was I who had asked for withdrawing the additional GST burden (on people), and the Centre should not take undue credit for it. The Centre won't have to spend a single paisa. Every state will have to find ways to tide over the revenue loss," Banerjee said.

Karnataka chief minister Siddaramaiah accused Modi of "deceiving" Indians.

"It was Modi who implemented GST, it was Modi who increased GST rates, and now it is Modi who is patting himself on the back. We were the ones who opposed when GST was increased to 18 per cent and 28 per cent. The very people who collected it all these years are now taking credit. See how cleverly they are deceiving Indians. You should not fall for this," Siddaramaiah added.

Telangana chief minister A Revanth Reddy on Monday demanded that the Central government compensate for the loss of revenues due to the recent GST rate rationalisation for five years.

Congress general secretary Jairam Ramesh said the "limited" reform comes eight years too late, and a "big question mark" remains on whether the benefits of tax reduction will be passed on to consumers.