Wed Sep 03 16:40:00 UTC 2025: Okay, here’s a news article summarizing and rewriting the provided text:

**Headline: Major GST Overhaul: India Streamlines Tax Rates, Promises Relief for Consumers**

**New Delhi:** In a significant move aimed at easing inflationary pressures and boosting the economy, the Modi government has announced a major restructuring of the Goods and Services Tax (GST) regime. Effective September 22nd, the GST system will be simplified to just two primary rates: 5% and 18%, eliminating the existing 12% and 28% slabs. The GST Council unanimously approved the new rates at the meeting.

“This is not just about rationalizing GST rates, but a structural reform to make compliance easier,” said Finance Minister Nirmala Sitharaman after the meeting. “These changes will reduce the cost of many items used by the common person.”

The changes are expected to bring significant relief to consumers by lowering the prices of a wide range of goods, from basic necessities like bread and milk to consumer durables like air conditioners and cars. Items like hair oil, soap, and bicycles will see their GST rates slashed from 12% or 18% to 5%. There will be no GST on bread and paratha. Life-saving drugs will be tax-free.

While the restructuring is projected to result in an estimated annual revenue loss of ₹47,700 crore for the government, officials are optimistic that increased consumer spending and economic activity will offset the initial shortfall. Luxury goods, such as tobacco, cigarettes, and high-end automobiles, will continue to be taxed at a higher rate of 40%.

Other notable rate changes include:

* Motorcycles with engine capacity exceeding 350cc: 18%
* Handicrafts, marble, and granite blocks: 5%
* Cement: 18%
* Three-wheeled vehicles: 18%
* All types of auto equipment: 18%
* Pan Masala, Tobacco products, cigarettes, aerated beverages with added sugar: 40%

Experts believe the simplified GST structure will stimulate domestic consumption, particularly among the middle class, and encourage private investment. The government hopes the move will usher in a period of accelerated economic growth.

The Prime Minister hinted at the upcoming changes during his Independence Day address, suggesting citizens would have “double Diwali” celebrations this year, referencing the anticipated economic boost.

**Key Takeaways:**

* GST rates streamlined to 5% and 18%.
* Significant price reductions expected on everyday goods.
* Government anticipates increased economic activity to offset revenue losses.
* New rates effective September 22nd.

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