India has rolled out the NextGen GST Reforms 2025, a landmark step towards building a simpler, fairer, and growth-oriented tax system. Prime Minister Narendra Modi called these reforms a milestone in India’s journey towards Viksit Bharat (Developed India). The changes include lower GST on medicines, insurance, food, dairy, automobiles, fisheries, and MSME-related sectors, directly benefiting citizens and businesses. With a focus on affordability, competitiveness, and ease of doing business, the reforms aim to strengthen healthcare, boost exports, empower farmers, and make everyday essentials more affordable for households.
Key Highlights of NextGen GST Reforms 2025
A Step Towards Viksit Bharat
Source: PIB Press Release
Prime Minister Shri Narendra Modi highlighted India’s decade-long journey of bold economic reforms that have reshaped the country’s financial framework and boosted its global image. He emphasized how reforms such as corporate tax cuts, Goods and Services Tax (GST), and changes in personal income tax have improved investment, unified the market, and made citizens’ lives easier.
The Prime Minister praised the newly launched #NextGenGST reforms, describing them as another significant milestone in this journey. These reforms aim to make the taxation system simpler, fairer, and more growth-oriented by simplifying structures, rationalising rates, and ensuring greater equity.
He also noted that these steps, along with India’s strong fiscal discipline, have enhanced the country’s credibility in the global financial community, leading to better sovereign credit ratings.
PM Modi’s Statement on X
Responding to a post by Shri Vijay, PM Modi shared his views on social media platform X (formerly Twitter):
“The last decade has been about bold reforms aimed at transforming India’s economic landscape, from corporate tax cuts that spurred investment, to GST creating a unified market, to personal income tax reforms enhancing Ease Of Living.
The #NextGenGST Reforms continue this journey, making the system simpler, fairer and more growth-oriented, while our fiscal discipline has earned global confidence and better credit ratings.
With these efforts, we are laying a strong foundation for a Viksit Bharat.”
The last decade has been about bold reforms aimed at transforming India’s economic landscape, from corporate tax cuts that spurred investment, to GST creating a unified market, to personal income tax reforms enhancing Ease Of Living.
— Narendra Modi (@narendramodi) September 4, 2025
The #NextGenGST Reforms continue this… https://t.co/OHxFzUvi5t
Key Highlights of PM’s Remarks
| Reform Area | Key Impact |
|---|---|
| Corporate Tax Cuts | Boosted investments and supported industrial growth. |
| GST Implementation | Created a single, unified national market by removing multiple state taxes. |
| Personal Income Tax Reforms | Enhanced ease of living for citizens with simplified taxation. |
| NextGen GST Reforms | Focus on simplification, rationalisation, fairness, and growth orientation. |
| Fiscal Discipline | Earned global confidence and improved India’s sovereign credit ratings. |
| Vision Ahead | Building a strong foundation for Viksit Bharat (Developed India). |
Strengthening Public Health & Nutrition in India
Source: PIB Press Release
Prime Minister Shri Narendra Modi emphasized the crucial role of #NextGenGST reforms in improving India’s public health and nutrition system. He highlighted that the reduction in tax rates on essential food items, cooking essentials, and protein-rich products has made healthy diets more affordable and accessible for families nationwide.
PM Modi also linked these reforms to major Government programs like Ayushman Bharat and POSHAN Abhiyaan, noting that together they represent a strong push towards holistic healthcare, balanced nutrition, and an improved quality of life.
PM Modi’s Statement on X
Responding to a post by Ms. Chandra R. Srikanth on X, the Prime Minister wrote:
“The #NextGenGST measures reflect the vision of ‘Swasth Bharat’ by making essential food items, cooking essentials and protein-rich products more affordable for families across India.Together, with initiatives like Ayushman Bharat and POSHAN Abhiyaan, these reforms strengthen our commitment to better health, balanced nutrition and improved quality of life for every citizen.”
The #NextGenGST measures reflect the vision of 'Swasth Bharat' by making essential food items, cooking essentials and protein-rich products more affordable for families across India.
— Narendra Modi (@narendramodi) September 4, 2025
Together, with initiatives like Ayushman Bharat and POSHAN Abhiyaan, these reforms strengthen… https://t.co/uTy6clHbv2
Key Highlights of PM’s Remarks
| Focus Area | Key Impact |
|---|---|
| NextGen GST Reforms | Reduced tax rates on essentials and protein-rich foods. |
| Impact on Families | More affordable healthy diets, improved access to balanced nutrition. |
| Public Health Link | Supports Government’s vision of Swasth Bharat (Healthy India). |
| Complementary Schemes | Aligns with Ayushman Bharat (healthcare) and POSHAN Abhiyaan (nutrition). |
| Overall Goal | Holistic well-being, better nutrition, and higher quality of life. |
A Catalyst for MSME Growth & Manufacturing Expansion
Source: PIB Press Release
Prime Minister Shri Narendra Modi reaffirmed the Government’s strong commitment to supporting India’s Micro, Small and Medium Enterprises (MSMEs), calling them the backbone of the economy. He noted that MSMEs play a vital role in job creation, innovation, and economic expansion.
PM Modi explained that over the years, the Government has launched multiple initiatives to empower MSMEs by easing credit access, improving market linkages, and reducing operational challenges. He highlighted that the recently introduced #NextGenGST reforms are another major step in this direction.
These reforms aim to rationalise GST rates, simplify compliance requirements, and provide a growth boost to small and medium enterprises across the country, thereby strengthening India’s manufacturing sector and expanding business opportunities.
PM Modi’s Statement on X
Responding to a post by Shri Shyam Sekhar on X, PM Modi said:
“MSMEs are the backbone of our economy, creating jobs and driving growth.
From easier credit to wider market access, every reform has been aimed at strengthening small and medium businesses.
The latest GST changes build on this momentum by rationalising rates, simplifying compliance and boosting enterprises across India.
#NextGenGST”
MSMEs are the backbone of our economy, creating jobs and driving growth.
— Narendra Modi (@narendramodi) September 4, 2025
From easier credit to wider market access, every reform has been aimed at strengthening small and medium businesses.
The latest GST changes build on this momentum by rationalising rates, simplifying… https://t.co/YKHiXWffUl
Key Highlights of PM’s Remarks
| Focus Area | Key Impact |
|---|---|
| Role of MSMEs | Crucial for job creation, innovation, and overall economic growth. |
| Government’s Efforts | Reforms introduced for credit access, market expansion, and ease of doing business. |
| NextGen GST Reforms | Rationalisation of rates and simplified compliance. |
| Impact on Enterprises | Boosts MSMEs and manufacturing expansion across India. |
| Long-Term Vision | Stronger, more competitive small business ecosystem. |
Boosting India’s Manufacturing Competitiveness
Source: PIB Press Release
Prime Minister Shri Narendra Modi highlighted the transformative impact of the latest #NextGenGST reforms on India’s manufacturing sector. He explained that the reforms bring in simplified tax slabs, streamlined digital compliance, and cost efficiencies, which will significantly strengthen domestic production and improve global competitiveness.
The Prime Minister stressed that these changes will reduce operational challenges for industries while encouraging higher demand for locally manufactured goods. By lowering input costs and simplifying taxation, the reforms are expected to accelerate the ‘Make in India’ mission and expand India’s role in global supply chains.
#NextGenGST is a game-changer for manufacturers. Lower input costs with simplified slabs of 5% & 18%, faster digital compliance and rising demand will give a big boost to ‘Made in India’ products. https://t.co/rjwgapgvhf
— Narendra Modi (@narendramodi) September 4, 2025
PM Modi’s Statement on X
Responding to a post by Shri Prakash Dadlani on X, PM Modi said:
“#NextGenGST is a game-changer for manufacturers. Lower input costs with simplified slabs of 5% & 18%, faster digital compliance and rising demand will give a big boost to ‘Made in India’ products.”
Key Highlights of PM’s Remarks
| Focus Area | Key Impact |
|---|---|
| Simplified Tax Slabs | Introduction of two key slabs (5% & 18%) to reduce complexity. |
| Lower Input Costs | Brings cost efficiencies to manufacturers, boosting competitiveness. |
| Digital Compliance | Streamlined and faster compliance through digital processes. |
| Impact on Manufacturing | Stronger domestic production and higher demand for Indian products. |
| Vision | Big push to ‘Made in India’ and global competitiveness. |
Empowering Dairy Farmers, Strengthening Rural Economy
Source: PIB Press Release
Prime Minister Shri Narendra Modi reaffirmed the Government’s steadfast commitment to dairy farmers and the rural economy, acknowledging their vital contribution in ensuring nutritional security and promoting inclusive growth.
PM Modi said that the Government has consistently worked to transform India’s dairy sector through initiatives such as the Rashtriya Gokul Mission, stronger support for cooperatives, and sustained sectoral reforms. He underlined that the newly launched #NextGenGST reforms represent another important step in this mission by making dairy products more affordable and boosting value addition across the sector.
The Prime Minister highlighted that these reforms, along with existing programs, will modernize and empower dairy farmers, strengthen the rural economy, and ensure better access to nutritious dairy products for households across India.
PM Modi’s Statement on X
Responding to a post by Amul Cooperative Society on X, PM Modi said:
“The contribution of our Annadatas has been pivotal in strengthening India’s rural economy and ensuring nutritional security for millions.
Through initiatives like the Rashtriya Gokul Mission, support for cooperatives and continuous reforms, our Government remains committed to transforming India’s dairy sector.
The #NextGenGST reforms are another step towards empowering lakhs of dairy farmers, boosting value addition and making dairy products more affordable for every household.”
The contribution of our Annadatas has been pivotal in strengthening India’s rural economy and ensuring nutritional security for millions.
— Narendra Modi (@narendramodi) September 4, 2025
Through initiatives like the Rashtriya Gokul Mission, support for cooperatives and continuous reforms, our Government remains committed to… https://t.co/GSeKhPUt6c
Key Highlights of PM’s Remarks
| Focus Area | Key Impact |
|---|---|
| Role of Dairy Farmers | Strengthen rural economy and provide nutritional security for millions. |
| Government Initiatives | Rashtriya Gokul Mission, cooperative support, and sectoral reforms. |
| NextGen GST Reforms | Lower costs, boost value addition, and affordability of dairy products. |
| Impact on Rural Economy | Empower lakhs of dairy farmers and drive inclusive growth. |
| Household Benefits | More affordable and accessible dairy products across India. |
Competitive Economy, MSME Growth, and Consumer Welfare
Source: PIB Press Release
The Government of India has announced a series of GST rationalisation measures to lower costs, fix duty-related issues, and improve competitiveness across sectors such as paper, leather, wood, handicrafts, commercial vehicles, tractors, food processing, textiles, toys, and packaging materials.
In a major relief for e-commerce exporters, the GST Council approved DGFT’s proposal (OM dated 8 May 2025) to remove the value threshold for GST refunds on low-value consignments. As per Annexure-V, Para 3 of the Press Note from the 56th GST Council meeting, Section 54(14) of the CGST Act, 2017 will be amended. This will allow exporters to claim refunds on shipments made with payment of tax, irrespective of value.
This reform is especially important for small exporters and e-commerce sellers using courier or postal services. It will simplify refund procedures, improve cash flow, reduce working capital pressures, and make participation in international trade easier for MSMEs and small businesses.
The Government said these reforms will also help in addressing inverted duty structures, strengthening supply chains, and boosting India’s position as a global hub in textiles, food processing, and handicrafts.
The Commerce Secretary welcomed the rationalisation, calling it a decisive step to strengthen India’s manufacturing base, empower MSMEs, and enhance competitiveness of Indian goods in domestic and global markets.
Key Takeaways from GST Rationalisation for Exporters
| Area | Key Change / Benefit |
|---|---|
| Lower Costs & Competitiveness | GST cuts on items like paper packaging, textiles, leather, and wood (from 12–18% to 5%) reduce production costs and make exports more competitive. |
| Boost to MSMEs & Exports | Faster refunds and rationalised rates across textiles, handicrafts, leather, food processing, and toys benefit MSMEs and export sectors. |
| Efficient Supply Chains | GST on trucks and delivery vans reduced (28% → 18%); lower GST on packaging materials reduces logistics costs. |
| Innovation & New Products | GST on toys and sports goods cut from 12% to 5%, supporting domestic manufacturing and reducing dependence on imports. |
| Sustainable Growth | Fixing inverted duty structures in textiles and food processing and lowering GST on eco-friendly products like bamboo, bagasse, and jute boards improves cash flow and aligns with sustainability standards. |
Transforming Business, Boosting Consumer Welfare
Source: PIB Press Release
Union Minister of Commerce and Industry Shri Piyush Goyal today said that the nutraceuticals industry is among the biggest beneficiaries of the GST reforms announced yesterday. Addressing the Bharat Nutraverse Expo 2025, he noted that reduced GST rates will provide an unprecedented boost to consumption demand, helping the sector achieve much larger volumes of sales.
Shri Goyal called the reforms a “festival gift” from Prime Minister Shri Narendra Modi, recalling the PM’s Independence Day announcement of major changes in GST. He stressed that the full benefit of lower GST rates must be passed on to consumers, as reduced prices will drive demand and accelerate industry growth.
“The benefit of the new rates should be passed on to the consumers entirely,” he said, urging industry leaders to commit both to consumer welfare and to promoting Indian-made products.
“We must commit to promote Indian products – products made with the sweat of hardworking Indians.”
The Minister highlighted that GST on many categories has been cut to as low as 5%, leading to significant savings across the sector. He underlined that what matters is not ownership—Indian or foreign—but manufacturing in India, which creates jobs, opportunities, and strengthens the economy.
Referring to India’s strong economic performance, Shri Goyal said:
“India is the fastest growing big economy of the world in times of turmoil.”
He reiterated the government’s vision of taking India’s GDP from USD 4 trillion to USD 30 trillion by 2047, calling it a collective mission under Viksit Bharat 2047.
On preventive healthcare, Shri Goyal stressed that a fit and healthy India is key to growth and praised the nutraceuticals sector for its role in promoting wellness.
“A fit and healthy India, supported by healthy food products, is key to India’s growth. The Prime Minister wants to ensure best preventive health care for all Indians.”
The Minister cited turmeric, ginger, and probiotics as examples of products contributing to better health, nutrition, and support for MSMEs and farmers. He concluded with confidence that Bharat Nutraverse 2025 will mark a turning point for the sector and a significant contribution to India’s development journey.
Major Boost to Fisheries
Source: PIB Press Release
The fisheries sector has received a major boost under the latest GST reforms approved in the 56th GST Council meeting on September 3, 2025. The reforms align with Prime Minister Shri Narendra Modi’s vision of making GST a “Good and Simple Tax” that empowers every sector of the economy.
The new GST rates aim to cut operational costs, enhance competitiveness in domestic and export markets, and directly benefit millions of fish farmers, aquaculturists, and small fishers who depend on the sector for their livelihoods.
Key GST Reductions for Fisheries Sector
| Item/Service | Previous GST Rate | New GST Rate |
|---|---|---|
| Fish oils, extracts, preserved fish & shrimp | 12% | 5% |
| Diesel engines, pumps, aerators, sprinklers | 12–18% | 5% |
| Chemicals (ammonia, micronutrients, etc.) | 12–18% | 5% |
| Fishing rods, tackle, landing & butterfly nets | 12% | 5% |
| Preserved fish, shrimp, molluscs | 12% | 5% |
| Job work in food & agro-processing (seafood) | 12% | 5% |
| Composting machines for aquaculture | 12–18% | 5% |
Why It Matters
- Lower input costs for aquaculture and capture fisheries.
- More affordable seafood for domestic consumers.
- Boost to exports, especially shrimp, where India is a global leader.
- Support for sustainable practices, with cheaper composting machines encouraging eco-friendly pond management.
- Relief for women’s self-help groups, cooperatives, and small-scale fishers.
Sector Snapshot
- India’s fisheries and aquaculture sector supports over 3 crore people.
- India is the second-largest fish producer globally, with production nearing 195 lakh tonnes (2024–25).
- Seafood exports crossed ₹60,000 crore in 2023–24, strengthening India’s Blue Economy.
The revised GST rates will take effect from 22nd September 2025. The government said the move marks a step towards making India’s fisheries sector more productive, competitive, and sustainable, fully aligned with the vision of Viksit Bharat and a robust Blue Economy.
A Step Towards Affordable Healthcare for All
Source: PIB Press Release
The Government of India has announced a landmark set of GST rationalisation measures aimed at lowering healthcare costs, promoting preventive health, and ensuring affordable nutrition. The move supports Prime Minister Shri Narendra Modi’s vision of “Affordable Healthcare for All” and complements flagship initiatives like Ayushman Bharat, Poshan Abhiyaan, and the Fit India Movement.
Sharing the update, Prime Minister Shri Narendra Modi said:
“The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy.”
During my Independence Day Speech, I had spoken about our intention to bring the Next-Generation reforms in GST.
— Narendra Modi (@narendramodi) September 3, 2025
The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and…
Welcoming the reform, Union Health Minister Shri JP Nadda remarked:
“Reduced tax rates on several essential products will enhance ease of living, help families manage costs, and bring relief to different sectors.”
Under the visionary leadership of Hon'ble PM Shri @narendramodi ji, the Union Government has announced the Next-Gen GST reforms to support ongoing growth and development.
— Jagat Prakash Nadda (@JPNadda) September 3, 2025
Reduced tax rates on several essential products will enhance ease of living, help families manage costs, and… pic.twitter.com/5Jg7NeRo3a
Finance Minister Smt. Nirmala Sitharaman added:
“These reforms have a multi-sectoral and multi-thematic focus, aimed at ensuring ease of living for all citizens and ease of doing business for all.”
Hon’ble Prime Minister Shri @narendramodi announced the Next-Generation GST Reforms in his Independence Day address from the ramparts of Red Fort.
— Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025
Working on the same principle, the GST Council has approved significant reforms today.
These reforms have a multi-sectoral and… pic.twitter.com/NzvvVScKCF
Key GST Reforms in Healthcare
| Sector / Item | Previous GST Rate | New GST Rate | Impact |
|---|---|---|---|
| Essential Medicines (diabetes, hypertension, cancer, etc.) | 12% | 5% / Nil | Lowers treatment costs |
| Pharma Job Work & Bio-medical Waste Services | 12% | 5% | Cuts production & disposal costs |
| Medical Devices & Equipment (oxygen, bandages, kits, glucometers, thermometers) | 12% | 5% | Makes diagnostics & treatment more affordable |
| Vision Care (spectacles, lenses, contacts) | 12% | 5% | Improves affordability for 10+ crore people lacking glasses |
| Health Insurance Premiums (family, senior citizen plans) | 18% | Exempt | Expands coverage, reduces out-of-pocket expenses |
| Nutrition (UHT milk, paneer, dry fruits, diabetic foods, beverages with milk/fruit pulp) | 12% | 0% / 5% | Ensures tax-free or low-tax daily nutrition |
| Fitness Services (gyms, fitness centres) | 18% | 5% | Promotes preventive healthcare & Fit India Movement |
| Sin Goods (tobacco, pan masala, sugary drinks) | No change | No change | Preventive health prioritised |
Why It Matters
- Lower treatment costs with reduced GST on medicines and devices.
- Wider insurance coverage as premiums on health and life insurance are exempted.
- Improved nutrition access with zero/low tax on milk, paneer, dry fruits, and diabetic foods.
- Affordable fitness services to encourage preventive health.
- No concessions for harmful products, keeping focus on long-term public health.
Big Thumbs Up to Automobile & Transport Sector
Source: PIB Press Release
The Government of India has announced major GST rate cuts for the automobile and transport sectors, a move expected to bring down costs, revive demand, generate employment, and strengthen India’s position as a global manufacturing hub.
The automobile industry is one of the largest employers in India, directly and indirectly supporting over 3.5 crore jobs across manufacturing, dealerships, logistics, financing, and repair services. Lower GST will not only make vehicles more affordable for households and fleet operators but also boost demand for ancillary industries such as tyres, batteries, glass, steel, plastics, and electronics.
Key GST Rate Reductions
Rising demand will create a multiplier effect across the auto supply chain.
Two-Wheelers (up to 350cc, including 350cc bikes)
- GST reduced from 28% → 18%
- Makes bikes more affordable for youth, professionals, farmers, traders, and gig workers.
- Lower EMIs and ownership costs will directly benefit rural and semi-urban households.
Small Cars(petrol <1200cc, diesel <1500cc, length <4m)
- GST reduced from 28% → 18%
- Encourages first-time buyers and middle-class households.
- Will boost sales in smaller towns and expand household mobility.
Large Cars
- Flat 40% GST, with cess removed
- Simplifies taxation, lowers effective burden, and allows full Input Tax Credit (ITC).
- Makes aspirational models more affordable and predictable for buyers.
Tractors
- <1800cc: GST cut from 12% → 5%
- Road tractors (>1800cc): GST cut from 28% → 18%
- Tractor parts: Taxed at 5%
- Boosts farm mechanisation, improves productivity in staple crops, and strengthens India’s global position in tractor manufacturing.
- Ancillary MSMEs making tyres, pumps, gears, and engines will benefit from higher production.
Buses (seating 10+ persons)
- GST reduced from 28% → 18%
- Cheaper buses and minibuses will benefit schools, corporates, state transport undertakings, and tour operators.
- Lower costs will encourage public transport use, reduce congestion, and make fares more affordable.
Commercial Goods Vehicles (Trucks, delivery vans, etc.)
- GST reduced from 28% → 18%
- Cuts upfront costs of trucks, lowering freight rates and logistics costs.
- Supports MSME truck owners and boosts competitiveness in exports and e-commerce deliveries.
- Aligns with PM Gati Shakti and the National Logistics Policy.
Third-Party Insurance of Goods Carriage
- GST reduced from 12% → 5% with ITC
- Lowers operational costs for truckers and logistics operators.
Auto Components
- Most components reduced to 18% GST
- Benefits a large network of MSMEs manufacturing tyres, batteries, electronics, plastics, and more.
- Rising demand will create a multiplier effect across the auto supply chain.
The #NextGenGST measures reflect the vision of 'Swasth Bharat' by making essential food items, cooking essentials and protein-rich products more affordable for families across India.
— Narendra Modi (@narendramodi) September 4, 2025
Together, with initiatives like Ayushman Bharat and POSHAN Abhiyaan, these reforms strengthen… https://t.co/uTy6clHbv2
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