Top News

On August 15, 2025, Prime Minister Modi, speaking from the ramparts of the Red Fort on Independence Day, declared, "I am going to give you a wonderful gift this Diwali. Over the past eight years, we have made major reforms to GST and simplified the tax system. Now, the time has come for a review. We have done this, discussed it with the states, and are bringing in the next generation of GST reforms." Now, that promise has come true. Starting Monday, there will be only two primary GST slabs, instead of the previous four. Additionally, a higher slab will apply to certain luxury and sin products, as Finance Minister Nirmala Sitharaman announced on September 3.

The GST was implemented eight years ago, combining central taxes like excise duty and state levies like VAT into a single tax. Previously, the GST had four slabs – 5%, 12%, 18%, and 28%. Additionally, cess was imposed on items like automobiles, tobacco, aerated drinks, coal, and lignite to offset the state's revenue loss. Under GST 2.0, the system has been simplified to just two slabs: 5% and 18%, while luxury and sin products will be taxed at a flat 40% without any cess.

Most items previously taxed at 12% and 18% have now been moved to the 5% slab or completely exempted from GST. Additionally, many items in the 28% slab have now been moved to the 18% or 40% tax bracket. Starting Monday, daily-use goods like dairy products, staple foods, consumer products, healthcare, education, and even agricultural products will become cheaper.

We've already mentioned the various goods and sectors where taxes will be reduced and goods will become cheaper. But it's also important to mention the products that will be completely exempt from tax. This means that from pencil sharpeners to parathas and khakhras, which items will not be taxed at all, let us tell you…

Food Products No Longer Taxed
Starting today, Monday, many food products used daily in households will be exempt from GST. Ultra-high temperature (UHT) milk, pre-packaged and labeled chhena or paneer, and all Indian breads such as chapati, roti, paratha, khakhra, and pizza bread have been exempted from GST.

Medicines and Health Services
In the healthcare sector, 33 life-saving medicines and drugs, which previously attracted 12% GST, have become tax-free from today. Three other specialty medicines used to treat cancer, rare diseases, and chronic illnesses, which previously attracted a 5% GST, are now subject to GST. All personal insurance and life insurance policies, including family floater plans and reinsurance, have been made subject to 0% GST, making them more affordable for families.

Education and Stationery are Also GST-free
Practice books, graph books, laboratory notebooks, and uncoated paper and paperboard used for making notebooks have also been exempted from GST. This is expected to provide significant relief to students and schools. Maps, atlases, wall maps, globes, etc. have also been included in the zero GST scope. Pencil sharpeners, erasers, pencils, crayons, pastels, drawing charcoal, and tailor's chalk are also exempt. Handmade paper and paperboard are also included under this exemption.

Defense and Aviation Imports
Effective today, September 22nd, exemptions have also been implemented in sectors related to national security and aviation. Imports of specific defense and aerospace products, such as flight speed and target motion simulators, missiles, rockets, drones, unmanned aerial vehicles, military aircraft such as the C-130 and C-295MW, deep-submergence vessels, sonobuoys, and parts for specialized high-performance batteries, have also been exempted from the scope of IGST.

Imports of technical documents for natural cut and polished diamonds and items exempted under the Diamond Prest Authorization up to 25 cents have also been exempted from GST. Artifacts and antiques brought for exhibitions are also included in this category.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.