India’s Next-Gen GST Makeover 2025: From Diwali Gift to Daily Relief: !!

The Government of India has announced a significant overhaul in the Goods and Services Tax (GST) system — a reform being hailed as the “Next-Gen GST”. Designed to bring relief to citizens, farmers, households, and businesses alike, this initiative focuses on affordability, simplicity, and inclusivity.

With reduced GST rates on essential goods and services, along with streamlined processes, the reform is expected to lower the cost of living, support agriculture, boost MSMEs, and strengthen the overall economy.

Let's See What are the Key Highlights of the Next-Gen GST Reform:

1) Daily Essentials Become Cheaper

• Hair oil, shampoo, toothpaste, soap, shaving cream: Reduced from 18% to 5%
• Butter, ghee, cheese, namkeens, mixtures: Reduced from 12% to 5%
• Feeding bottles, baby napkins, clinical diapers: Now at 5%
• Sewing machines and utensils: GST reduced to 5%

2) Relief for Farmers and the Agriculture Sector

• Tractors and tractor parts: From 12–18% to 5%
• Drip irrigation systems and sprinklers: Reduced to 5%
• Bio-pesticides and micronutrients: Now at 5%
• Farming machinery for soil preparation and harvesting: From 12% to 5%

3) Healthcare Made More Affordable

• Health and life insurance: GST completely removed
• Medical-grade oxygen, thermometers, diagnostic kits: Now at 5%
• Corrective spectacles and glucose test strips: Reduced to 5%

4) Education Essentials at Zero GST

• Maps, charts, globes, pencils, crayons, erasers: GST removed (0%)
• Exercise books and notebooks: GST removed completely

5) Vehicles Become More Accessible

• Hybrid and CNG cars (up to 1200cc): Reduced from 28% to 18%
• Diesel hybrid cars (up to 1500cc): Now taxed at 18%
• Three-wheelers and motorcycles (up to 350cc): Reduced to 18%
• Goods transport vehicles: GST fixed at 18%

6) Lower Costs on Electronic Appliances

• Air conditioners, TVs (above 32”), dishwashers: Reduced from 28% to 18%
• Monitors and projectors: Now at 18% GST

7) Process Reforms Introduced

• Automatic GST registration within 3 working days for eligible applicants
• Refunds sanctioned through an automated, system-based process
• Faster input tax credit processing for businesses under ?2.5 lakh turnover
• Special focus on zero-rated supplies and sectors with inverted duty structures

Prime Minister’s Message

Prime Minister Narendra Modi described this reform as a “gift for every Indian this Diwali”, highlighting that reduced taxes will not only ease the burden on households but also empower MSMEs, startups, and the wider economy.

“Everyday items will become cheaper, and this will also give a new boost to the economy.” – Narendra Modi

In Summary

The Next-Gen GST Reform is a forward-looking initiative that prioritizes affordability, ease of living, and economic empowerment. By lowering tax rates and simplifying processes, it benefits every section of society — from farmers to families, students to businesses.

This reform is a strong step towards building an Aatmanirbhar Bharat, ensuring that the festive season brings not only celebration but also real relief for millions across the country.