FM Sitharaman Calls GST Overhaul a ‘People’s Reform’

• Nearly 400 products to see price reduction from September 22.
• Daily essentials like bread, milk, paneer will be tax-free; most goods at 5%, others at 18%.
• Premiums on health and life insurance now tax-free; sin goods taxed at 40%.
• Reforms simplify business compliance, refunds, and product classification.

GG News Bureau
New Delhi, 6th Sep: Finance Minister Nirmala Sitharaman on Saturday hailed the landmark Goods and Services Tax (GST) overhaul as a “people’s reform” that will benefit every household, enhance consumption, and strengthen the economy.

In an interview with PTI, Sitharaman said she will personally monitor the passing on of GST rate cuts to consumers. She noted that many businesses, from car manufacturers to insurance firms and apparel brands, have already announced price reductions, with nearly 400 products—including soaps, cars, shampoos, tractors, and air conditioners—set to cost less from September 22, the first day of Navaratri. Premiums on individual health and life insurance will now be tax-free, while a 40% rate applies only to a small list of sin goods and ultra-luxury items.

“This is a reform which touches the lives of all 140 crore people. There is no individual in this country who is untouched by GST. The poorest of the poor also have something small that they buy, touched by GST,” Sitharaman said.

Under the new GST slab structure, daily essentials like bread, milk, and paneer will attract zero tax, while most other common goods will be taxed at 5%, and everything else at 18%. The previous 12% and 28% slabs have been abolished.

Sitharaman emphasised that the reforms will lower monthly household ration and medical bills, enable aspirational purchases, and trigger a consumption-led economic boost. “People do understand… Rs 100 today can buy one and a half of the commodity. Earlier, they bought one,” she explained.

The overhaul also simplifies business operations, particularly for SMEs. Compliance norms have been eased, refunds are to be processed within stipulated timelines, and registrations can now be completed within three days. Confusions over product classifications, like popcorn and cream buns, have been addressed by grouping similar goods under the same tax slab.

Sitharaman added that industry has responded positively and she is confident that price reductions will be passed on to consumers. On inflation, she said it is under control and expects the GST cut to further stimulate consumption.