Cheaper Shopping Ahead: GST Reform Promises Savings on Essentials and Lifestyle Products

National News: The central government is preparing a big change in the Goods and Services Tax (GST) system that will directly reduce the prices of several everyday items. The plan is to remove the 12% and 28% tax brackets and shift most products into lower tax categories.

At present, shirts, trousers, and footwear costing more than ₹1,000 are taxed at 12% GST, while those priced below ₹1,000 fall under the 5% category. With the new proposal, all varieties of clothing and footwear will be taxed at 5%, making them more affordable for consumers.

Wider Range of Products to See Price Cuts

Not just clothes and shoes—hundreds of other products will also get cheaper. According to officials, nearly 99% of goods under the 12% slab will now move into the 5% category.

This list covers a wide range of items such as dry fruits, packaged snacks, processed foods, chutneys, jams, juices, large water bottles, pasta, candles, mosquito nets, Ayurvedic medicines, kitchen utensils, aluminum cookware, sports equipment, furniture, nuts and bolts, and even some railway-related products.

For ordinary families, this means the cost of daily groceries and household goods will fall, giving them some relief in their monthly budgets.

Revenue Loss Expected but Recovery Likely

Experts point out that this decision may cause the government to lose some tax income in the short run. The 12% category contributes only about 5% of total GST revenue, compared to the 18% slab, which brings in around 65%. Based on the present average GST collection of ₹1.8 lakh crore per month, the expected shortfall could be around ₹4,000 crore monthly.

However, tax professionals believe that lower prices will lead to higher sales volumes, which will eventually make up for the initial revenue dip.

At the same time, several items from the 28% slab will be shifted to the 18% bracket, while a few selected goods may even face a 40% GST under fresh proposals.

Boost for Economy and Consumers

According to former CBIC chairman Najib Shah, the new GST structure marks a revolutionary step. He said that by reducing tax rates and simplifying the system, the government will not only ease the burden on small businesses but also give consumers more disposable income. This, in turn, is expected to increase demand and support overall economic growth.

Economists believe that these reforms will strengthen India’s tax framework, encourage domestic consumption, and make the country a stronger investment hub in the long term.