1. Simplifying GST: Two-Tier Tax Slabs (5% & 18%)
The GST Council has just rolled out a new tax framework, narrowing GST slabs to just 5% and 18%. This sweeping reform slashes rates on over 150 essential categories, from food and healthcare items to textiles, electronics, and renewable energy, while luxury or sin goods remain taxed heavily. This is not just about lower prices, it is a step toward streamlined compliance and a stronger middle-class economy.
2. GST Cuts Fueling Affordability
Price reductions are rolling out fast. Raymond is already slashing prices on sub-₹2,500 apparel to reflect newly lowered GST from 12% to 5%. Solar modules and wind turbines have also received tax relief, with GST cut to 5%, boosting India’s clean energy mission. These changes signal immediate consumer savings and long-term industrial growth.
3. Luxury Taxed Heavily: Higher GST on Premium Products
On the flip side, premium goods are facing steeper taxes. Two-wheelers under 350cc are now cheaper with GST at 18%, while motorcycles above 350cc attract a hefty 40% tax. Entertainment is also affected, with IPL tickets now carrying 40% GST, up from 28%, pushing costs higher for fans.
4. Tech and Drones Get a Boost: GST Revamped
The drone sector is set to soar, with commercial UAVs now attracting just 5% GST, and military drones and motion simulators even being exempted. This signals big opportunities in drone-led innovation and services across industries.
5. Insurance Agent Commissions Under Fire
Though life insurance premiums are now exempt, commissions for agents are still taxed at 18%. The Life Insurance Council is lobbying to bring this to zero, which could make insurance more attractive while reducing operational burdens on agents.
6. Online Real-Money Gaming Gets Tighter: GST Jumps to 40%
To align with other sin goods, GST on online gaming and betting has been raised sharply from 28% to 40%. Companies can still claim input tax credits, but the move is expected to raise costs for players while putting more pressure on platforms.
Why These GST Moves are Big News
These GST reforms matter because they directly influence how India spends and saves. Lower rates on essentials like food, healthcare, apparel, and even renewable energy mean consumers have more disposable income, fueling demand, especially during the festive season. The government is also pushing inclusivity with cuts that support education, healthcare, and agriculture, making life easier for rural households and MSMEs.
At the same time, the sharp tax hikes on luxuries and non-essential categories like premium bikes, IPL tickets, and online gaming show the government’s intent to balance affordability with responsibility. By taxing indulgences heavily, the GST regime creates space for essential goods to become cheaper.
Sector-specific signals are also clear. Drones and renewable energy stand to benefit immensely from revised GST rates, which could drive innovation and attract investment in high-tech and green sectors. Meanwhile, ongoing debates around areas like insurance commissions reflect the balancing act between industry support and revenue generation.
Above all, this GST overhaul highlights policy momentum. From reducing slabs to expanding exemptions, the government is signaling a consumer-friendly, growth-oriented approach that redefines how businesses and households plan their spending.
