Overview

• Draft proposals shift the system largely to 5% and 18% bands by scrapping the 12% and 28% slabs, with a narrow high-rate category of about 40% for sin and luxury items.
• Healthcare would see the biggest relief, with all 12% medicines proposed at 5% and around 30 cancer and rare-disease drugs going tax-free, alongside cuts on oxygen, surgical items and diagnostics.
• Many durables and autos are proposed to drop from 28% to 18%, while fertilisers, tractors, irrigation gear, textiles, footwear up to ₹2,500 and various education supplies move to 5% or zero.
• Selective increases include raising GST on business and premium air travel to 18% and hiking levies on casinos, betting and race clubs to 40%, with proposals to cut beauty and wellness services and sub-₹100 cinema tickets to 5%.
• Analysts estimate annual revenue losses of roughly ₹70,000 crore to ₹1.8 lakh crore, mostly for states, even as research suggests lower rates could lift GDP by 20–50 bps if passed through to consumers.