Ziraat Times Team Report
Srinagar: In a major fiscal reform hailed as a “Historic Diwali Gift for the Nation”, the Government of India has announced sweeping changes to the Goods and Services Tax (GST) structure under the banner of Next-Gen GST Reforms. These reforms, aimed at making daily essentials, agriculture, healthcare, automobiles, education and electronics more affordable, are expected to provide some relief to households and boost demand in certain sectors.
For Jammu & Kashmir, which has a unique socio-economic profile with agriculture, horticulture, handicrafts, tourism and services at its core, the reforms are likely to carry wide-ranging benefits.
Ziraat Times analyses major GST rate reductions and their impact on J&K consumers:
Daily Essentials Made Cheaper
Consumers across India, including J&K, will see reduced GST rates on commonly used daily essentials:
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Hair oil, shampoo, toothpaste, toilet soap, bath soap, and shaving cream: 18% → 5%
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Butter, ghee, cheese, dairy spreads: 12% → 5%
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Packaged namkeens, bhujia, and mixtures: 12% → 5%
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Utensils: 12% → 5%
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Feeding bottles and napkins for babies: 12% → 5%
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Sewing machines and parts: 12% → 5%
Impact on J&K:
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Daily household budgets for many consumers will ease.
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Local small traders and kiryana stores will benefit from increased sales due to reduced costs.
Agriculture and Farmers’ Relief
Agriculture, the backbone of J&K’s economy, has received targeted reforms:
- Tractor tyres and parts: 18% → 5%
- Tractors: 12% → 5%
- Specified bio-pesticides, micro-nutrients: 12% → 5%
- Irrigation systems and sprinklers: 18% → 5%
- Agricultural/forestry machinery: 18% → 5%
Impact on J&K:
- Farmers and orchardists will have access to cheaper tractors, irrigation tools and spraying machinery.
- Fruit and vegetable growers will save on bio-pesticides and nutrient costs.
- Overall, farming costs will decline, offering relief at a time when floods and landslides have damaged croplands.
Relief in Healthcare
The healthcare sector, already under strain due to recent natural disasters in J&K, gets a substantial boost:
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Individual health and life insurance: 18% → Nil
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Thermometers: 12% → Nil
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Medical-grade oxygen: 12% → Nil
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All diagnostic kits and reagents: 12% → Nil
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Glucometers and test strips: 12% → Nil
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Corrective spectacles: 12% → 5%
Impact on J&K:
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Private hospitals in Srinagar, Jammu and other towns will now procure essential medical equipment at lower costs.
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Patients will benefit as diagnostic labs pass on reduced testing costs.
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Health insurance, now GST-free, could encourage greater uptake among middle-class Kashmiri families.
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Affordable Educational Tools
The government has reduced GST on basic education items:
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Maps, charts, globes: 12% → Nil
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Pencils, sharpeners, crayons, pastels: 12% → Nil
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Exercise books and notebooks: 12% → Nil
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Erasers: 12% → Nil
Impact on J&K:
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Parents in J&K where education costs weigh heavily, will find relief in school expenses.
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Small stationery retailers will see a rise in sales.
Automobiles Made Affordable
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Petrol & petrol-hybrid, LPG, CNG cars (engine capacity ≤1200cc, length ≤4000mm): 28% → 18%
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Diesel & diesel-hybrid cars (engine capacity ≤1500cc, length ≤4000mm): 28% → 18%
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Motorcycles (≤350cc): 28% → 18%
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Motor vehicles for transport of goods: 28% → 18%
Impact on J&K:
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Small families in J&K will benefit from affordable two-wheelers and small cars.
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Transporters carrying apples and dry fruits to mandis outside J&K will see reduced costs for goods vehicles.
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Automobile dealerships in Jammu and Srinagar are expected to see higher demand.
Electronics and Appliances
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Air conditioners: 28% → 18%
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Televisions (below 32”): 28% → 18%
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Monitors and projectors: 28% → 18%
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Washing machines: 28% → 18%
Impact on J&K:
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Urban middle-class households will find consumer electronics more affordable.
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Electronics retailers expect increased sales during festive seasons.
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Students and professionals relying on projectors, TVs, and monitors for learning and work-from-home setups will benefit significantly.
Process Reforms in GST
The reforms are not only about tax cuts but also about process efficiency:
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Automatic registration within 3 working days for applicants identified by the system.
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Refunds: Sanction of provisional refunds by proper officers through system-based risk evaluation, including zero-rated supplies and supplies with inverted duty structure.
Impact on J&K businesses:
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Startups in Srinagar IT hubs and small traders in Jammu’s warehousing sector will find GST compliance faster and easier.
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Exporters of Kashmiri handicrafts and dry fruits will benefit from quicker refunds, improving cash flow.
