Udupi: The Union government’s decision to reduce the Goods and Services Tax (GST) slabs from four to two will significantly ease the financial burden on the middle class, farmers, and traders while boosting the overall economy, said BJP Udupi District Media Pramukh Srinidhi Hegde.

Major reforms in GST structure

The reforms were finalised at the 56th GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman. Currently, GST is levied across four slabs—5%, 12%, 18% and 28%. The new structure abolishes the 12% and 28% slabs, leaving only two effective rates—5% and 18%.

The two-tier system will come into effect from September 22, the first day of Navratri, and is being described as a turning point in the country’s economic history.

Relief for families and individuals

Hegde said the reforms will directly benefit families across the country. “The GST on cars has been reduced from 28% to 18%, which will make vehicles more affordable during the festive season,” he noted.

The government has also abolished GST on health and life insurance products, earlier taxed at 18%. According to Hegde, GST will not be levied on term life, ULIP, endowment policies, reinsurance, and all individual life insurance policies, thereby encouraging greater insurance penetration in the country.

Impact on healthcare

The GST cuts will have a strong effect on healthcare affordability. The 12% GST on 33 life-saving medicines has been reduced to zero, with cancer medicines also exempted. Additionally, GST on several key medical products—including thermometers, medical oxygen, diagnostic kits, glucometers, test strips, and spectacles—has been reduced to 5% from earlier rates of 12% or 18%.

“This step will provide great financial relief to patients and their families, ensuring access to essential healthcare at lower costs,” Hegde said.

Political angle

Citing Prime Minister Narendra Modi’s Independence Day address, Hegde said the reforms fulfil the promise of reducing GST as a “festive gift” ahead of Navratri and Diwali.

He criticised opposition parties for their stance on the issue, stating, “Congress leaders who opposed GST reduction are now behaving like a monkey that ate indigo. They must clearly state their stand on this relief for the people.”

Conclusion

With GST reforms touching sectors such as automobiles, insurance, and medicines, the government expects both immediate festive season relief for consumers and long-term benefits for the economy. Srinidhi Hegde extended gratitude to the central government, stating that these reforms will simplify taxation while reducing the financial stress on common citizens.