New Delhi [India], September 4 (ANI): The GST Council, in its meeting on Wednesday, approved sweeping changes in tax rates on automobiles and essential goods as part of the next-generation GST reforms announced by Prime Minister Narendra Modi.
In the automobile sector, GST on petrol and petrol-hybrid cars, as well as LPG and CNG variants with engine capacity up to 1200 cc and length not exceeding 4000 mm, has been slashed from 28 per cent to 18 per cent. Diesel and diesel-hybrid cars with engine capacity up to 1500 cc and length within 4000 mm will also see their rates reduced from 28 per cent to 18 per cent.
Similarly, three-wheelers, motorcycles up to 350 cc, and motor vehicles used for transporting goods have moved from the 28 per cent bracket to 18 per cent.
For the agriculture sector, tractors—which earlier attracted 12 per cent GST—will now be taxed at just 5 per cent. Tractor tyres and parts, previously under the 18 per cent slab, have also been lowered to 5 per cent. The restructuring significantly eases the tax burden on both vehicles and farm machinery.
Finance Minister Nirmala Sitharaman, who announced the reforms earlier in the day, said that the measures were aimed at reducing costs for households as well.
On the essentials front, items of daily use such as hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes, and shaving cream will now fall under the 5 per cent slab instead of 18 per cent. Similarly, butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujiya, and mixtures have all seen GST rates reduced from 12 per cent to 5 per cent.
Household products such as utensils, feeding bottles, baby napkins, and clinical diapers have also become cheaper following a rate cut to 5 per cent. Sewing machines and their parts, earlier taxed at 12 per cent, will now attract only 5 per cent GST.
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