Are you also troubled by rising inflation,So this news has brought a big relief for you. The GST Council has made a big change in the tax rates,which can make your everyday goods and services cheaper. According to a report by SBI Research,the new GST rules can reduce retail inflation by 0.65 to 0.75 percent in the coming time. This change will have a direct impact on the pockets of the common people. Let’s know what these new rules are and what benefits you will get from them.
Now two types of taxes,40% on one
The old four-tier tax structure (5%,12%,18%,28%) has been abolished in the 56th GST Council meeting. Now,a two-tier tax system (5% and 18%) has been approved in its place. Along with this,a special tax rate of 40% has been fixed on certain luxury goods and services. This decision will come into effect from 22 September 2025.
413 items became cheaper,tax increased on only 40
According to the SBI Research report,this change has affected the GST rates of a total of 453 items. Out of these,tax has been reduced on 413 items,while tax has increased on only 40. The biggest thing is that GST on about 295 essential items has been reduced from 12% to 5% or 0%. Customers will get the direct benefit of this,due to which inflation on food items can be reduced by 0.25 to 0.30%.
Direct impact on retail inflation
The report states that GST rates on services have also been rationalized,which will have a further impact of 0.40 to 0.45 percent on retail inflation. Due to this,customers are expected to get a benefit of about 50% in services as well. Overall,retail inflation may come down by 0.65 to 0.75 percent during FY 2026-27.
Reduction in the average GST rate
The average GST rate had come down from 14.4% to 11.6% in September 2019 due to the rationalization of rates from time to time by the GST Council. Now,after the new changes,this average rate may come down further to 9.5%. The new GST rules will make essential goods and services cheaper,which will reduce inflation and provide great benefits to the general public. This is a move that will prove beneficial for both the Indian economy and the common citizen.
