Auto, pharma sectors cheer GST slabs; airlines say wings clipped
Context: While the goods and services tax (GST) rate changes authorised by the GST Council night brought cheer to the auto, insurance, consumer appliances, pharmaceuticals, and renewable energy sectors, among others, some of that was tinged with reproach. A few sectors are outright upset with the tax changes.
Airlines: Higher GST on non-economy seats.
Vegetable oil producers called for the resolution of the inverted duty structure on edible oils, which means that the GST rate on raw materials in their industry is higher than the rate on the finished product. This mismatch was something that the Council corrected for the fertilizer and man-made textiles industries.
The increase in the GST rate for labour charges, from 12% to 18%, has also led to some resistance, with small entrepreneurs saying that they would be hit hard by the change.
Mixed response
While the textile industry has welcomed the revision of GST rates for both man-made fibre and cotton sectors, it has also expressed its disappointment over the 18% duty for garments priced above ₹2,500 each.
The Cloth Manufacturers Association of India pointed out that such garments are also consumed in large numbers by the common man, especially in the form of woollens, wedding wear, traditional clothing, handlooms, and embroidered clothes. Charging 18% GST on these will make them significantly more costly, it said.
This nuanced cheer can be seen in the auto sector as well. Auto manufacturers have welcomed the rate rationalisation for the sector, along with the removal of the GST Compensation Cess applicable on cars. As per the new rates, entry-level and mid-segment cars priced up to ₹14 lakh will see a tax reduction of up to 13 percentage points, while high-end cars with engines above 1200 cc too are set to see an 8 to 10 percentage point cut in their tax rate. Auto dealers, however, have voiced some worries about consumers postponing their purchases until September 22, when the new rates come into force, and have called for greater clarity on what happens to the cess on vehicles they have already bought from manufacturers but not yet sold to customers.
The healthcare industry’s reaction has been more unequivocally positive, saying that the decision to reduce GST from 12% to 5% on a wide range of medical products.
Consumer appliance makers were also upbeat about the GST rate cuts, saying they would boost demand, especially in the run-up to the festive season.
Sources: TH
GS2: Polity; Union-State relation
Centre and Manipur govt. ink peace pact with Kuki-Zo groups
Context: The Union Home Ministry and the Manipur government signed a Suspension of Operations (SoO) pact with the Kuki-Zo insurgent groups with “re-negotiated terms and conditions or ground rules”, the Ministry.
Security forces will conduct verification of cadres and de-list foreign nationals, if any, the Ministry said.
A government official said once identified, the foreign nationals would be deported.
The revised ground rules reiterate territorial integrity of Manipur and relocation of camps of insurgent groups.
Prior to May 3, 2023, the SoO groups demanded autonomous territorial councils within Manipur, but post-violence the demands changed.
Asked if the SoO groups have given up their demand for a separate administration or Union Territory with a legislature, Seilen Haokip, spokesperson Kuki National Organisation (KNO), one of the signatories, told The Hindu, “Though the agreement speaks about territorial integrity of Manipur, it also mentions political settlement within the Constitution of India. The Constitution speaks about the integrity of the country, not a district or a State.”
He added that “negotiated political settlement within Constitution of India” is a new inclusion in the agreement as it was not there in the 2008 text when the demand was for territorial councils in Manipur.
The Kuki-Zo Council (KZC), a conglomerate of civil society organisations, agreed to open the National Highway-2 (Imphal-Dimapur) passing through Kangpokpi district “for the free movement of commuters and essential goods”, the Ministry said.
Revised SoO pact tightens norms for Kuki-Zo groups
Context: The revised Suspension of Operations (SoO) agreement signed between the Ministry of Home Affairs, Manipur government and 24 Kuki-Zo insurgent groups lays down the mechanism to monitor activities of cadres, and requires them to obtain Aadhaar cards.
According to the 2008 SoO pact, signed in the aftermath of the Kuki-Naga clashes in the 1990s, around 2,200 cadres under the umbrella of the Kuki National Organisation (KNO) and United People’s Front (UPF) were entitled to a stipend of ₹6,000 per month, which was stopped since ethnic violence erupted in the State on May 3, 2023.
The revised pact, stipend will be paid only through Aadhaar-linked bank accounts to those members who are present in camps during inspection. Photo identity cards shall be provided by the Manipur Police, it says.
Six camps each
The agreement states that the KNO and UPF shall have six camps each, instead of the 14 they operate presently and the camps shall not be located close to populated areas, National Highways and within areas vulnerable to conflict. The camps are to be located at reasonable distance from the Myanmar border as well.
A complete list of the cadres will be prepared by the government with name, date of birth, and other details along with latest photographs. Foreign nationals, if any, shall be deleted from the list of leaders and cadres, the pact says.
The preamble of the pact states that it was mutually agreed to review the implementation of the ground rules, and KNO and UPF shall “completely abjure the path of violence and abide by the Constitution of India, laws of the land, and territorial integrity of Manipur”. “SoO agreement shall be followed by tripartite dialogue with KNO and UPF to pave the way for a negotiated political settlement under the Constitution of India in a time-bound manner,” it says.
The pact bars groups from having association with any other armed group, within the country or outside; from recruiting new cadres; and carrying out offensive operations against security forces, other groups, and the public. The Army, Assam Rifles, Central Armed Police Forces and the the State Police shall not launch operations against the groups “as long as they abide” by the agreement.
State govt. for use of ballot papers in local body polls in future
Context: Amidst allegations of “vote theft” by the Congress, the State government on Thursday recommended to the State Election Commission (SEC) to revert to using ballot papers instead of EVMs in future elections to local bodies, citing the “erosion of confidence” in EVMs.
The Cabinet also recommended revision of voters’ list for such elections. There has been much anticipation in political circles over the long-delayed elections to the taluk and zilla panchayats, besides the newly formed five city corporations under the Greater Bengaluru Authority.
The State government plans to bring in suitable amendments to various provisions of law to bring back ballot papers in local body polls.
Amendments would be brought to Gram Swaraj and Panchayat Raj Act, 1993, Karnataka Municipalities Act, 1964, and Greater Bengaluru Governance Act, 2024, that govern the conduct of elections. He also acknowledged that the State Election Commission (SEC) is an independent body under Articles 243 (K) and 243 (ZA) of the Indian Constitution.
Binding on SEC
“At this point in time, the Cabinet has made recommendations, which may be accepted or not. However, once we make suitable changes in the laws and rules, it will be binding on the SEC,”.
Power to prepare rolls
In the light of “vote chori” allegations, Mr. Patil also said that the Cabinet has decided to recommend to the SEC to consider revision of voters list for the elections to the local bodies. “Till now, the voters list prepared for the Assembly constituencies were being considered. We are seeking changes in the light of ‘vote theft’ discussions. There have been discrepancies in in the voters list.” The recommendation is to consider revising or redoing the voters list, he added.
Government sources said that the recommendations for the voters list had come after the SEC sought necessary amendments based on the provisions in the GBA Act. Seeking necessary amendments to the GBA act, the SEC has said that the if the State government did not intend to adopt the Assembly electoral rolls, the SEC may be given power to prepare the electoral rolls for the elections of councillors under GBA Act.
It pointed out that the GBA Act is silent with respect to preparation of electoral rolls by the SEC or adopting the Assembly electoral roll. The SEC Commissioner G.S. Sangreshi, in his letter, has also said that the constitutional provisions do not direct the SECs to adopt the Legislative Assembly electoral rolls.
He has sought framing of rules related to Registration of Electoral Rolls by the SEC itself similar to that of Registration of Electors Rules, 1960, framed under The Representation of People’s Act, 1950, or bring amendment to Section 35 of Greater Bengaluru Governance Act regarding preparation of electoral rolls similar to provisions in Gram Swaraj and Panchayat Raj Act, 1993, Karnataka Municipalities Act, 1964, and Karnataka Municipal Corporation Act, 1976.
SEC ready to revert to ballot papers
Context: Following the State Cabinet’s recommendation, the State Election Commission (SEC) has said that it is ready to revert to ballot papers for the panchayat and urban local body (ULB) polls, as per rules.
The commission will conduct the polls by revising the electoral rolls as per recommended rules. “We have been using ballot papers for gram panchayat polls so far. EVMs were used in ZP/TP and urban local body polls. Now we are ready to use ballot papers for both gram panchayat and ZP/TP polls,” he said.
Stating that elections to the five corporations under the Greater Bengaluru Authority (GBA) will most likely be held in February next year, Mr. Sangreshi said the conduct of Zilla Panchayat (ZP)/ Taluk Panchayat (TP) polls will depend on revision of the electoral rolls. “We will have to see how much time the revision of rolls will take. These elections will be announced after the State government fixes reservations for various constituencies,” he said.
The ZP/TP elections in Karnataka have been pending since May 2021 owing to a delay in the delimitation of panchayat constituencies and notifying reservation.
The State government in 2022 divested the State Election Commission of its powers to carry out the delimitation exercise and draw up the reservation.
However, the State government failed to carry out these two exercises in time and thus delayed the polls. After much persuasion, it did complete the delimitation process in December 2023 but it is yet to notify reservation of seats.
Context: For the seventh straight year, the Indian Institute of Technology (IIT), Madras claimed the top overall position in the higher education rankings announced by the National Institutional Ranking Framework (NIRF). It also remained the country’s best engineering college for the tenth straight year.
The NIRF’s methodology, however, came in for some criticism from Union Education Minister Dharmendra Pradhan, who presented the India Rankings 2025 awards. He was especially skeptical about the ‘peer perception’ parameter, that carries 10% of marks for the ranking, and suggested that the NIRF should ensure that government-funded institutions do not fall behind because of this yardstick.
After the 2024 rankings, States and State-run educational institutions had alleged that the rankings reflected “regional bias” as metropolitan education institutions score higher on the ‘peer perception’ criteria, in comparison to suburban or State-run higher education institutions.
The other parameters that the NIRF considers are teaching, learning, and resources; research and professional practice; graduation outcomes; and research and inclusivity.
Mr. Pradhan said he was confident that the NIRF would evolve into one of the best accreditation frameworks by including more parameters such as entrepreneurs created by an institution, involving more data-driven approaches, and including more categories and institutions in the future.
The top 100 institutions in the overall category comprised 24 State universities, 22 private deemed universities, 19 IITs and the Indian Institute of Science (IISc), nine private universities, eight National Institutes of Technology, seven Central universities, five medical institutions, four Indian Institutes of Science Education and Research, one college, and the Indian Agriculture Research Institute.
IISc, Bengaluru topped the universities category for the tenth consecutive year and also stood first in the research institutions category for the fifth consecutive year. IIM Ahmedabad was the best institution for management studies for the sixth consecutive year. The All India Institute of Medical Sciences (AIIMS), New Delhi occupied the top slot among medical institutions for the eighth consecutive year and also topped the rankings in the dental category for the first time.
IISc retains second rank among top 100 HEIs
Context: Several Higher Education Institutions (HEIs) from Karnataka including premiere institutes, figure among India’s top 100 institutions in the National Institutional Ranking Framework (NIRF)-2025 list released by the Union Ministry of Education.
Institutions, including the Indian Institute of Science (IISc), Indian Institute of Management, Bangalore (IIMB), National Institute of Technology Surathkal (NITK), National Institute for Mental Health and Neuro Sciences (NIMHANS), National Law School of India University (NLSIU), Bengaluru, and Mysore and Bangalore universities are on the list.
IISc has retained its second rank among the top 100 HEIs across the country and best university, and also tops as the best research institute in the country.
While NITK has got the 54th rank, NIMHANS has secured 60th place among top 100 HEIs.
Three private institutions Manipal Academy of Higher Education (MAHE), JSS Academy for Higher Education and Research and CHRIST (Deemed to be University) have secured 14th, 38th and 96th places, respectively.
But, among top 100 universities, even as IISc leads, it is followed by MAHE ranked third, JSS Academy for Higher Education and Research at 21st rank, Bangalore University at 65, Jain (Deemed-to-be University) at 62, CHRIST (Deemed to be University) at 63, University of Mysore at 71, NITTE University at 80, and University of Agriculture Sciences Bengaluru (UAS-B) at 95th rank.
Bangalore University, which ranked 81 among all HEIs in 2024, has improved its ranking to 65 this year.
“This is a significant achievement which will motivate us to continue striving for academic excellence and to further enhance the quality of education and research at our university,” said Dr. Jayakara S.M., Vice-Chancellor, Bangalore University.
Despite having 32 State-run universities, only four universities managed to rank in the top 50 public universities in the list.
The University of Mysore (UoM) has secured 20th rank, Bangalore University (BU) 26th rank, UAS-B 37 and Visvesvaraya Technological University (VTU) 50th rank.
Degree colleges
Meanwhile, four degree colleges — Kristu Jayanti College, Bengaluru has ranked 34, M.S. Ramaiah Arts, Science and Commerce College, Bengaluru 67, St. Aloysius College, Mangaluru 73, and St. Joseph’s Commerce College Bengaluru has secured 98th rank — figure in the top 100 colleges category. No government-run colleges are on the list.
While NLSIU, Bengaluru, has retained its first rank in NIRF Law Rankings-2025 for the eighth consecutive year, IIMB has been ranked second among management colleges in the country.
UAS-B ranked 11th in India, no. 1 in State in agri and allied sectors
Context: The University of Agricultural Sciences-Bangalore (UAS-B) stands 11th among the total of 75 institutes of higher education and research in agriculture and allied sectors in the country as per the ranking under the National Institutional Ranking Framework.
While the UAS-B, the oldest agricultural university in the State, is ranked 11th nationally, it tops the State among the agricultural, horticultural, and veterinary universities as well as research institutes. Karnataka has a total of seven universities in agriculture and allied sectors.
University of Agricultural Sciences-Dharwad, which has been ranked 35 nationally, is the only other agricultural university from Karnataka to figure in the list that has identified the top 30 institutes. Though the State has a slew of ICAR research institutes in the sectors of horticulture, veterinary, and entomology, none of them have figured in the list of 30 best institutes of the country. For the UAS-B, it has been a status quo as it had been ranked 11th in the previous year’s ranking too. Incidentally, the UAS-B has secured A+ rating this year from the National Assessment and Accreditation Council (NAAC).
Kristu Jayanti secures 34th rank in NIRF 2025
Context: Kristu Jayanti (Deemed to be University) has been ranked 34th in the Colleges category of the National Institutional Ranking Framework (NIRF) 2025 released by the Ministry of Education. Union Education Minister Dharmendra Pradhan announced the rankings.
This marks the highest position achieved by a college from Karnataka in this category, according to the university release. The institution received evaluation across six NIRF parameters, including Teaching, Learning and Resources, Research and Professional Practice, Graduation Outcomes, Outreach and Inclusivity, and Perception. The university has aligned its efforts with national development goals under Viksit Bharat @ 2047.
Bidadi township will be developed into India’s first AI-powered township: DKS
Context: The long-delayed Greater Bengaluru Integrated Township (GBIT) will be developed as India’s first and largest Artificial Intelligence (AI)-powered integrated township, Deputy Chief Minister D.K. Shivakumar.
Spread across 8,493 acres, preliminary notification for which was issued in March earlier this year, the “work-live-play” model township at Bidadi, about 30 km from Bengaluru, is envisioned as Karnataka’s second central business hub, estimated to cost over ₹20,000 crore and will be completed over the next three years, Mr. Shivakumar said.
“Over 2,000 acres have been earmarked for AI-based industries and ancillaries. The project is expected to create lakhs of new jobs across IT, AI, start-ups, and service sectors. Dedicated skilling centres will train the workforce for AI-driven and future-ready industries,” he said.
GBIT will include residential spaces, healthcare, education, and cultural facilities. More than 1,100 acres will be reserved for parks and open spaces, making it one of India’s most sustainable green cities.
Compensation package
Since the project requires 6,731 acres of private land across nine villages, the government has planned compensation under a framework aligned with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013.
In a first-of-its-kind measure, the government will provide livelihood support from the date of the final notification until monetary compensation is paid or developed sites are handed over.
Under the plan, Kushki landowners will receive ₹30,000 per acre annually, Tari landowners ₹40,000, Bhagait landowners ₹50,000, and landless families ₹25,000 per year. The Deputy Chief Minister also assured that habitations in the notified township area will be retained and not acquired.
Better connectivity
The township will be located 9 km from STRR Road, 11 km from NICE Road, 5 km from the Mysuru–Bengaluru Highway, and 2.2 km from the Bengaluru–Dindigul Highway.
Financial resources for the project have been secured in advance. Internal funding of ₹2,950 crore has been set aside from Bengaluru Metropolitan Region Development Authority’s existing funds, while ₹17,500 crore will be raised externally through financial institutions, backed by government surety.
In total, the authority has over ₹20,000 crore at its disposal and will begin disbursing compensation once the land acquisition process is completed.
GS3: Transportation; Civil Aviation; UDAN scheme
Seven airports operationalised under UDAN scheme connecting 118 routes
Context: Of the nine airports in Karnataka, seven have been operationalised under the Regional Connectivity Scheme — Ude Desh ka Aam Nagrik (RCS-UDAN).
As per information by Minister of State for Civil Aviation Murlidhar Mohol to a question in the Rajya Sabha during the Monsoon Session of Parliament, airports at Bidar, Mysuru, Vidyanagar, Hubballi, Kalaburagi, Belagavi, and Shivamogga have been developed under RCS-UDAN, and 118 routes have been operationalised under the scheme.
“An amount of ₹146.89 crore has been utilised under the UDAN scheme for this purpose. All the seven airports are currently operational. Bidar airport is connected to Bengaluru by Star Air,” he said.
He added that most of the routes under the scheme, which completed their RCS tenure, have demonstrated financial viability and continue commercial operations.
“Flight operations on a few routes were discontinued after the expiry of the RCS tenure. To revive these routes, special bidding rounds are conducted to operationalise them,” he added.
In reply to another question on current status of development of airports in Ballari, Kolar, Kushalnagar, Raichur, and Hassan under the scheme, the Minister said, “Under UDAN 5.2, bids have been received for small aircraft operations (less than 20 seats) for Ballari and Kolar airstrips”.
No bids have been received for Kushalnagar, Raichur, and Hassan airstrips. “The Ministry of Civil Aviation has requested the State government to provide consent, and confirm the availability of land for the development of these airports. This includes ensuring that the land is provided free of cost and free from encumbrances, and is suitable for operating small aircraft (2B) initially, with the potential for future expansion to category 3C,” he said.
The Minister added said that the actual timelines for airport projects depend upon various factors, such as land acquisition, mandatory clearances, and removal of obstacles.
GS2: Health; Birth Rate; Total Fertility Rate
‘India’s birth rate down, first dip in TFR in 2 years’
Context: India’s Crude Birth Rate (CBR), the number of children born per 1,000 people in the population in a year, has declined 0.7-points from 19.1 in 2022 to 18.4 in 2023.
The country’s Total Fertility Rate (TFR) has fallen for the first time in two years to 1.9 in 2023, according to the latest Sample Registration Survey Statistical Report for 2023. In 2021 and 2022, India’s TFR remained constant at 2.0.
The report, released by the Office of the Registrar General of India this week, revealed that the highest CBR was in Bihar at 25.8, and the lowest was in Tamil Nadu at 12. Bihar reported the highest TFR (2.8) among the bigger States and Union Territories (UTs), and Delhi reported the lowest (1.2).
The report pointed out that 18 States and UTs had reported a TFR of below the replacement level TFR of 2.1. Replacement level TFR denotes the average number of children each woman needs to give birth for one generation to replace the other.
The RGI released the Civil Registration System (CRS), Sample Registration System (SRS), and Medical Certification of Cause of Death (MCCD) reports for 2021 after a four-year delay in May this year, and in June, the SRS, CRS, and MCCD data for 2022 were released. While the SRS for 2023 has been made public, the corresponding CRS and MCCD datasets are yet to appear on the Census website.
The SRS 2023 datasets showed that the proportion of the elderly in the country (people above 60) rose by 0.7 percentage points in a year to 9.7% of the population. Kerala has the highest proportion of elderly population at 15%. Assam (7.6%), Delhi (7.7%), and Jharkhand (7.6%) reported the lowest proportion of their respective populations to be above 60.
The TFR data, which denotes the average number of children expected to be born per woman during her entire span of reproductive period, further showed that all States reporting TFR that is higher than replacement level were in northern India – Bihar (2.8), Uttar Pradesh (2.6), Madhya Pradesh (2.4), Rajasthan (2.3), and Chhattisgarh (2.2). The States and UTs reporting the lowest TFR included Delhi (1.2), West Bengal (1.3), Tamil Nadu (1.3), and Maharashtra (1.4).
GS3: Defence; Maritime Security
Singapore backs India on patrolling Malacca Straits
Context: Singapore acknowledged India’s plans to patrol the strategically important Malacca Straits.
The discussion was part of the agenda when Prime Minister Narendra Modi met Singaporean Prime Minister Lawrence Wong at Hyderabad House where the two sides signed five agreements, including one to export green energy from India to Singapore through dedicated ports.
Our cooperation will not remain confined to traditional areas. In keeping with the needs of changing times, advanced manufacturing, green shipping, skilling, civil nuclear energy, and urban water management will also emerge as focus points of our collaboration,” said Mr. Modi welcoming his Singaporean counterpart who paid a three-day visit to India.
A joint statement said the two sides will deepen defence technology cooperation in “quantum computing, AI, automation and unmanned vessels”. Both sides will cooperate to enhance maritime security, “submarine rescue” in the “Indo-Pacific” and the Indo-Pacific Oceans Initiative, said the statement, adding that “Singapore acknowledges with appreciation India’s interest in the Malacca Straits Patrol”.
India is interested in patrolling the Malacca Straits as it is next to the Andaman Sea and said that talks are on. Malaysia, Indonesia, Thailand and Singapore patrol the Straits and India is expecting some kind of synergy among member countries.
GS3:
Cars get cheaper, festive sales likely to hit top gear
Context: The Goods and Services Tax (GST) overhaul will make cars cheaper this festive season across segments. Entry-level and mid-segment cars priced ₹14 lakh and below will see a reduction up to 13% in GST and cess, making them more attractive to a price-sensitive customer base. High-end cars with engines above 1,200 cc are set to become 5–10% cheaper.
Small cars that run on petrol, LPG and CNG with engines below 1,200 cc, and diesel cars of up to 1,500 cc and with a length under 4 metres will attract a GST of 18% instead of 28%. The cess of 1% and 3% will no longer be applicable.
“The benefit is greater for entry and mid-level segment as there is price sensitivity. The news will definitely bring cheer to buyers, and we expect more footfall at showrooms,” said Vinkesh Gulati, vice-president, Automotive Skill Development Council, and former president of the Federation of Automobile Dealers Association.
Unsoo Kim, managing director of Hyundai Motor India Ltd., called the GST revision a move that will “strengthen consumer confidence”. The company has 60% of its internal combustion engine portfolio under the 18% slab rate, with the remainder at 40%. All mid-sized and large cars, up to and above 1,500 cc and over 4 metres in length, will attract a higher GST of 40% instead of 28%. But the net savings of 5-10% come from a complete removal of cess, which stood at 17% for passenger vehicles with up to 1,500 cc engines, 20% with over 1,500 cc engines, and 22% for SUVs.
“Government listened to the automotive industry’s long-standing wish list of rationalising GST rates. This will induce the much-needed impetus by boosting consumption and bring momentum to the automotive industry which essentially remains the pulse of the Indian economy,” said Santosh Iyer, managing director & CEO, Mercedes-Benz India, in a press statement.
The flat GST on electric vehicles remains unchanged at 5%.
Higher GST for bikes: However, motorbike enthusiasts have been left disappointed as high-end two-wheelers with bigger engines will invite a higher GST of 40% instead of the prevalent 31% rate that includes 28% GST and 3% cess for bikes with engines above 350 cc.
There is also small relief expected in vehicle servicing and repair costs as the GST on spare parts has been brought down to 18% from 28%, but due to the varying taxation for different items such as rubber and fibre, the eventual benefit will accrue where there is a net drop.
The GST on commercial vehicles such as buses and trucks has dropped from 28% to 18%. “This will not only reduce logistics costs for the economy, but encourage customers to upgrade their fleets with modern, fuel efficient and safer trucks and buses,” said Vinod Aggarwal, vice-chairman, EML, and managing director & CEO of VE Commercial Vehicles.
But dealerships rue that the implementation of the new rates comes into effect three weeks later on September 22. They fear that this will result in some buyers postponing their purchase. Also, due to the removal of cess, dealerships are staring at a loss of ₹2,500 crore because of credit payments made on the cess for the inventory already purchased from automakers.
Dealers deposit the cess as a credit item at the time of their purchase and make the actual deposit on the GST portal once they sell the car to a buyer.
There is a lowering of tax on farm equipment too from 18% to 5% for tractors and parts. “These GST reforms will accelerate mechanisation by making tractors, harvesters, balers and implements more affordable, while lowering overall operating costs for farmers,” said tractor and construction equipment maker CNH India’s president & managing director, Narinder Mittal.
GS3:
White goods makers anticipate a cracker of a festive season
Context: The consumer appliances industry welcomed with enthusiasm the reduction of GST rates on air conditioners and dishwashers and the standardisation of rates for all television variants, especially ahead of the festive season.
The GST Council slashed rates on air-conditioners and dishwashers from 28% to 18%, while it standardised the rate on all types of televisions to a lower 18%. Previously, the purchase of televisions housed two tax rates — 18% and 28% — depending on the screen size being within or more than 32 inches.
No change for phones
The council, however, did not alter the GST on smartphones, tablets and laptops. While welcoming the revision for consumer appliances, Pankaj Mohindroo, Chairman at the India Cellular & Electronics Association (ICEA), said, “We also remain hopeful that the rationalisation of GST on smartphones and laptops will be considered in the future, given its potential to improve affordability and strengthen digital inclusion.”
GS3:
Zero GST is expected to increase penetration of health, life insurance
Context: The healthcare industry has welcomed the zero GST on individual health and life insurance policies, calling it a master stroke.
The GST Council’s decision to bring down the GST on individual life and health insurance policies from 18% to zero will make more families opt for medical cover, said analysts and industry executives.
An insurance cover will ease burden on families when medical inflation is rising sharply and is unchecked, they said.
The move made health protection a right, not a privilege.
“This progressive reform will directly benefit patients by lowering treatment costs, improving affordability, and expanding access to essential medical technologies,”.
Scrapping the tax on insurance services would mean that insurers would lose access to input tax credits on expenses linked to such policies. Insurers will be required to reverse input tax credits relating to these exempt outputs. This embedded tax could eventually feed into the costing structure, impacting the profits of the companies, they said.
“The exemption also extends to the reinsurance of these individual policies, ensuring tax neutrality across the risk management chain. However, the benefit is limited to individual covers. Group insurance policies, such as employer-sponsored health or life schemes, will continue to attract 18% GST with no input tax credit available to the employers,”.
“This makes it clear that the policy intent is to directly ease costs for households rather than institutional buyers,”.
While healthcare services by doctors, hospitals, and diagnostic centres were exempt under the GST regime, the government has announced a series of GST rationalisation measures to promote a health-positive tax regime, the Health Ministry.
GS3:
Premium air travel to become costlier; industry anguished
Context: The airline industry has termed the Centre’s decision to raise goods and services tax on premium air travel, including premium economy and business class flight tickets, from 12% to 18% “disappointing”.
The revised taxes will come into effect from September 22 and apply both for domestic and international flights offered by Indian and foreign carriers.
“Aviation has tremendous potential to contribute to India’s economic growth, both directly as Indian airlines grow, and indirectly through increased connectivity for travellers and businesses alike. It is therefore disappointing to hear of a decision to increase the GST on non-economy travel with no clear justification,” said International Air Transport Association’s regional vice-president, Asia Pacific, Sheldon Hee.
Over the years, this component of tax had more than doubled, growing from the 8.6% rate in 2017 under the service tax regime to 18%, he added.
‘Must consider risks’
While first-, business- and premium economy-class travel is offered by foreign carriers, among Indian airlines, Air India offers business and premium economy travel on domestic and international flights. IndiGo too has introduced business-class seats on flights to Mumbai and Bengaluru from New Delhi as well as to Singapore, Bangkok and Dubai, which will grow to 12 total routes by the end of 2025.
GS3:
18% GST on labour charges alarms MSMEs
Context: The GST rate for labour charges (job work) has been increased from 12% to 18% and it is expected to hit hard the Micro, Small, and Medium-scale Enterprises (MSMEs).
The long-pending demands of the job working/sub-contract industries in the manufacturing sector is the reduction of GST on job work to 5% from 12%. However, the government has increased it to 18%. This will create several challenges for the job working in micro and small-scale industries.
The Coimbatore District Small Industries Association has urged the government to have a relook at the rates for job work. The government should put in place a system so that lower GST rates for job work benefit the MSMEs that are vendors to larger industries and get only labour charges. The 18% duty will block the liquidity for the MSMEs, it said.
GS3:
Centre approves creation of new, independent class of ‘environment auditors’
Context: The Environment Ministry has authorised the creation of a new, independent class of “environment auditors” to supplement the work of State pollution control Boards in inspecting and verifying projects for compliance with environmental laws. Private, accredited agencies can also undertake environment impact assessment studies that will then be appraised by expert committees.
Under the new rules, called the Environment Audit Rules, 2025, private agencies can get themselves accredited as auditors. Environment auditors can get licences and be authorised to evaluate project compliance with environmental laws and adherence to best practices in prevention, control, and abatement of pollution.
“The overall framework for monitoring and compliance within the existing environmental framework is presently supported by the Central Pollution Control Board, the Regional Offices of the Ministry, and the State PCBs/Pollution Control Committees, which are facing constraints in terms of manpower, resources, capacity, and infrastructure.
These limitations hamper their ability to monitor and enforce environmental compliance across the vast number of projects and industries operating,” said a press statement by the Ministry.
“This scheme aims to bridge the manpower and infrastructure deficits, thereby strengthening the effective implementation of environmental compliance mechanisms. Furthermore, the scheme is designed to ensure greater transparency, accountability, and credibility in the compliance monitoring process, fostering trust among stakeholders and promoting sustainable environmental governance.”
Audits undertaken can be used for compliance with Green Credit Rules, under which individuals and organisations can gain tradeable “credits” for afforestation, sustainable water management, and waste management, among other activities.
GS3:
Renewable energy industry sees boost to domestic manufacturing
Context: The GST Council’s recommendation to reduce the taxation rate on renewable energy devices relating to solar, wind and biogas, and on parts required to manufacture them, from 12% to 5%, has been welcomed by the industry as a step towards spurring domestic manufacturing by easing capital expenditure.
Furthermore, industry associations stipulate this may translate to potentially lower tariffs for consumers.
National Solar Energy Federation of India (NSEFI) said the move was a “positive step” and adhered to a long-standing request of the industry for a return to status quo.
