New GST Reforms: Union Finance Minister Nirmala Sitharaman announced a significant policy change on Wednesday: individual health and life insurance plans would no longer be subject to the Goods and Services Tax (GST). The move, known as the “Next-Gen GST Reform,” is a historic Diwali present to the country and is anticipated to lower living expenses while increasing economic activity. By combining the 12 and 28 percent rates, the 56th GST Council meeting determined to rationalize the GST rates into two slabs of 5 and 18 percent.

When Do the New GST Rates Apply?
The GST rates on services and goods other than cigarettes, chewing tobacco products, including zarda, unmanufactured tobacco, and beedi, will change as of September 22, 2025, per the recommendations made by the GST Council at its 56th meeting. For the time being, the current GST rates and compensatory cess will not be altered for some products like cigarettes, chewing tobacco products like zarda, unmanufactured tobacco, and beedis. After all loan and interest obligations associated with the compensation cess have been fully settled, the updated rates will be put into effect at a later time.

Also Read: Next-Gen GST Reforms: Full List of New GST Cuts Revealed

GST on Medicines:
Except for those listed at a nil charge, all medications have been prescribed at a concessional GST rate of 5%. All medical devices, tools, and equipment used for veterinary, dental, surgical, and medical purposes are subject to the 5% rate; all other uses are expressly exempt.

GST on Motorcycles:
Motorcycles with engines up to 350 cc are subject to an 18% GST rate, whereas those with engines more than 350 cc are subject to a 40% GST charge.

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