GST 2.0 Rate Cuts: All eyes on Council as 56th meet underway; over 80 items likely to attract lower taxes?

GST 2.0 Rate Cuts Likely: All eyes are on the Finance Minister Nirmala Sitharaman-led GST Council as it prepares to announce the outcome of its 56th meeting since the launch of the indirect tax regime in 2017. According to sources, more than 80 products -- spread across 11 categories -- are expected to see rate reductions in the latest review, with the decisions to be revealed on Thursday, September 4.

These categories are: Food and kitchen items, beverages (non-alcoholic), daily personal care products, household items, students and educational materials, medicines and medical devices, agriculture equipment and supplies, automobiles, building materials, home appliances, and toys, sports goods, and handicrafts. 

The government is reportedly planning to lower GST rates on a “substantial” number of items, aligning with the Prime Minister’s Independence Day promise of a “big Diwali gift” in the form of tax cuts.

Here’s a look at the likely changes one can expect from the review:

Food and kitchen

• Paneer/chhena (packed): From 5% to 0%
• UHT milk (tetra pack): From 5% to 0%
• Paratha/porotta and Indian breads: From 18% to 0%
• Roti/chapati/khakhra, pizza bread: From 5% to 0%
• Butter/ghee/dairy spreads: From 12% to 5%
• Cheese: From 12% to 5%
• Dry fruits: From 12% to 5%
• Chocolate, pastry, cake, biscuit, jam: From 18% to 5%
• Namkeen/bhujia/mixture/chabena (packed): From 12% to 5%
• Pasta/spaghetti/macaroni/noodles: From 12% to 5%
• Corn flakes & other cereal flakes: From 18% to 5%
• Pickles: From 12% to 5%
• Fruit & vegetable juices: From 12% to 5%
• Coconut water (packed): From 12% to 5%
• Sugar and sugar cubes: From 12% to 5%
• Coffee: From 18% to 5%
• Curry paste, mayonnaise, salad dressing: From 12% to 5%
• Soup & broth (ready/pre-mix): From 18% to 5%
• Yeast & baking powder: From 12% to 5%
• Fish/meat (canned/ready): From 12% to 5%

Beverages (non-alcoholic)

• 20-litre water jar: From 12% to 5%
• Plant-based milk: From 18% to 5%
• Fruit pulp/fruit juice: From 12% to 5%
• Milk-based drinks: From 12% to 5%

Daily personal care

• Toilet soap, toothpaste, toothbrush: From 18% to 5%
• Tooth powder: From 12% to 5%
• Hair oil, shampoo, talcum, shaving cream, aftershave lotion: From 18% to 5%
• Comb, hairpin: From 12% to 5%

Household items

• Diaper, baby napkin, feeding bottle: From 12% to 5%
• Matchbox: From 12% to 5%
• Candle: From 12% to 5%
• Kitchen utensils (steel, aluminium, copper, brass, wood): From 12% to 5%
• Stove (kerosene/wood): From 12% to 5%
• Sewing machine: From 12% to 5%
• Rubber band: From 12% to 5%

Students & education

• Lab notebook: From 12% to 0%
• Eraser: From 5% to 0%
• Uncoated textbook/notebook paper: From 12% to 0%
• Map, atlas: From 12% to 0%
• Pencil, crayon: From 12% to 0%
• Pencil sharpener: From 12% to 0%
• Geometry box, colour box: From 12% to 5%
• Paper carton, paper box: From 12% to 5%
• Paper molded tray: From 12% to 5%

Medicine and medical devices

• Rare disease & cancer medicines: From 5–12% to 0%
• Ayurveda, Unani, homeopathy medicines: From 12% to 5%
• Medical oxygen: From 12% to 5%
• Diagnostic kits: From 12% to 5%
• Thermometer: From 18% to 5%
• Surgical instruments: From 12% to 5%

Agriculture and farming

• Tractor (except above 1800 cc): From 12% to 5%
• Tractor tyres/tubes: From 18% to 5%
• Tractor parts: From 18% to 5%
• Harvester, thresher & parts: From 12% to 5%
• Cultivation equipment: From 12% to 5%
• Poultry, beekeeping equipment: From 12% to 5%
• Sprinkler, drip irrigation, nozzle: From 12% to 5%
• Hand pump: From 12% to 5%
• Composting equipment: From 12% to 5%

Vehicles

• Two-wheeler bike/scooter (<350cc): From 28% to 18%
• Small cars: From 28% to 18%
• Three-wheeler vehicle (Auto): From 28% to 18%
• Passenger vehicle (>10 seats): From 28% to 18%
• Engine parts, ignition, pump (vehicle): From 28% to 18%
• Bicycle & related parts: From 12% to 5%

Building material

• Cement: From 28% to 18%
• Marble/travertine blocks, sand-lime bricks: From 12% to 5%
• Bagasse, rice husk, jute stalk: From 12% to 5%
• Bamboo flooring/joinery: From 12% to 5%
• Wooden packing case & pallet: From 12% to 5%

Home appliances

• TV set (LCD/LED >32”): From 28% to 18%
• Monitor and projector (non-TV): From 28% to 18%
• Air conditioner: From 28% to 18%
• Dishwasher: From 28% to 18%
• Solar water heater & system, solar cooker: From 12% to 5%

Toys, sports equipment and handicrafts

• Toys (non-electronic): From 12% to 5%
• Wooden/metal/textile toys: From 12% to 5%
• Board games (Ludo, Carrom, Chess): From 12% to 5%
• Sports goods (except exercise equipment): From 12% to 5%
• Handicraft statue: From 12% to 5%
• Brass/copper/aluminium artwork: From 12% to 5%
• Paintings: From 12% to 5%