Jodhpur, Sep 4 (IANS) Laghu Udyog Bharati on Thursday welcomed the reforms introduced under GST 2.0, calling them a major relief for the common man and a catalyst for economic growth. The changes, approved in the 56th meeting of the GST Council and announced by Finance Minister Nirmala Sitharaman are set to simplify the tax structure and boost business confidence across sectors.
Speaking to IANS, National President of Laghu Udyog Bharati, Ghanshyam Ojha, said, “Instead of the earlier four slabs, GST will now have only 5 per cent, 18 per cent for the common man. This rationalisation will make essential items like soap, shampoo, air conditioners, and small cars more affordable for the general public.”
State Vice President Mahavir Chopra of Laghu Udyog Bharati added, “Finance Minister Sitharaman has also announced that basic food items like milk, roti, paratha, and chenna will be GST-free. In addition, there will be no GST on individual health and life insurance, and 33 life-saving medicines, including those for rare and critical diseases, will also be exempt. It’s a matter of great joy that the GST Council approved these reforms, including rate reductions and structural improvements.”
“Recently, we were encouraged by the rise in GDP. I had earlier hinted that some decisions were on the horizon that would surprise everyone. Insurance has been made tax-free, and products that were once unaffordable due to high taxes will now be within reach for the common man. This will have a positive impact on both people and business,” he told IANS.
Luxury goods and harmful products like tobacco and alcohol will now face a higher GST rate of 40 per cent, up from 28 per cent earlier.
“Medium and large cars will be taxed more heavily, but we expect overall GST collection to rise due to increased compliance and a broader tax base,” Chopra added.
Local businessman Suresh Kumar Vishnoi said, “The government is offering real relief to the public. This is a big step forward, and it will provide lasting benefits to people across all sections of society.”
The changes are expected to benefit farmers, MSMEs, women, youth, and especially the middle class. Small traders will also find it easier to operate under the streamlined system. GST 2.0 is aimed at simplifying the tax regime, correcting the inverted duty structure, and reducing the financial burden on citizens.
The inverted duty structure — where the GST on raw materials is higher than on finished products — has long been a challenge for manufacturers. This often made production costlier, hurting small industries. The reforms now aim to correct this imbalance.
From a consumer perspective, the new rates will reduce the cost of daily essentials, health insurance, and small vehicles. The removal of 18 per cent GST on health insurance for individuals, families, and senior citizens is particularly noteworthy, as it makes healthcare more accessible.
As the GST Council approved historical changes to India’s indirect tax structure, several daily-use goods will become cheaper from September 22.
The new tax structure, adopted on Wednesday, has two major slabs now 5 per cent and 18 per cent, and a whopping 40 per cent for luxury and sin goods.
For the common man, this change means more money in hand, which the government hopes will be routed into the economy, giving it a significant boost.
From groceries and fertilisers to footwear, textiles, and even renewable energy, a broad basket of goods and services is set to become more affordable. Items previously taxed at 12 per cent and 28 per cent will now largely migrate to the other two slabs, making a wide range of products cheaper.
–IANS
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