New Delhi: The GST Council on Wednesday announced sweeping rate cuts and exemptions, including nil tax on Indian breads such as roti and paratha, exemption of health and life insurance, and zero GST on 33 life-saving drugs. The changes will come into effect from September 22, the first day of Navratri.
“All this will be effective September 22, 2025, the first day of Navratri. The changes on GST of all products except sin goods will be applicable from 22 September,” Union finance minister Nirmala Sitharaman said after chairing the 56th Council meeting. She added that tobacco and other sin goods would continue at existing rates, along with the compensation cess, until outstanding loan and interest obligations were fully discharged.
‘Reforms with a focus on common man’
“These reforms have been carried out with a focus on the common man. Every tax on the common man’s daily use items has gone through a rigorous review and in most cases the rates have come down drastically,” Sitharaman said. “Labour-intensive industries have been given support. Farmers and the agriculture sector, as well as the health sector, will benefit. Key drivers of the economy will be given prominence.”
Announcing relief in insurance, she said, “Insurance services from 18 per cent currently will go into two, three different categories. Exemption of GST on all individual life insurance policies — whether term life, ULIP, or endowment policies — and reinsurance thereof, to make insurance affordable for the common man and increase coverage in the country. Exemption of GST on all individual health insurance policies, including family floater and senior citizen policies, and reinsurance thereof, to make insurance affordable and increase coverage.”
GST on 33 life-saving drugs reduced to zero
Sitharaman further said that GST on 33 life-saving drugs had been reduced from 12 to zero per cent, with three drugs used for treating cancer, rare diseases and severe chronic conditions also moving from 5 to nil. Several other medicines will now attract 5 per cent GST instead of 12 per cent. In addition, spectacles and corrective goggles will be taxed at 5 per cent, down from 28 per cent.