GST Council approves two-rate tax slab effective September 22
Context: The Goods and Services Tax (GST) Council, during its 56th meeting, decided to revamp the tax structure into a primarily two-rate system, as proposed by the Central government, Union Finance Minister Nirmala Sitharaman.
- Apart from the two rates of 5% and 18%, the new GST system would also include a 40% “special rate” on sin goods such as tobacco and luxury items such as large cars, yachts, and helicopters.
- The decisions will come into effect from September 22 for most items, she said. Only tobacco and tobacco-related products will move to the new structure at a date to be specified by the Finance Minister.
- The government also calculated that the net fiscal implication of the rate cuts, based on consumption patterns in 2023-24, would be ₹48,000 crore. However, the officials clarified that the real implication would be known on the basis of current consumption, and that the rate rationalisation was expected to result in a buoyancy effect, and improved compliance.
- “These reforms have been carried out with a focus on the common man,” Ms. Sitharaman said. “Every tax levied on the common man has gone through a rigorous looking into, and in most cases, the rates have come down. Labour-intensive industries have been given good support.
- Farmers and agriculture will benefit from the decisions. Health-related sectors will also benefit.”
- She said common-use and middle-class items will see a reduction, with products such as hair oil, soap, shampoo, toothbrush, toothpaste, bicycle, table and kitchen ware, and other household articles being moved to 5% from either 18% or 12%. The other items moving down to the 5% rate include namkeens, sauces, pasta, instant noodles, chocolates, coffee, and butter.
- Twelve specified bio-pesticides, bio-menthol, and labour-intensive items such as handicrafts, marble, travertine blocks, granite blocks, and intermediate leather goods would move from 12% to 5%. Notably, cement will move from 28% to 18%.
- No tax on Indian bread: The Finance Minister further said that items such as ultra-high temperature milk, paneer, and all Indian bread, including rotis, chapatis, and parathas would see their tax rate fall to 0% from the earlier 5%.
- On insurance services, individual life insurance policies and individual health policies will move to 0% from 18%. A total of 33 life-saving medicines will move from 12% to 0%, The tax on electric vehicles has been retained at 5%.
- Products such as air-conditioners, all TVs, dishwashers, small cars, and motorcycles of engine capacity less than or equal to 350cc would see their tax reduced from 28% to 18%.
- Buses, trucks and ambulances, as well as all auto parts, would also attract a GST rate of 18%. Spectacles to correct vision would move from the 28% slab to 5%.
- “The long-pending inverted duty structure is being rectified for the manmade textile sector by reducing the GST rate on manmade fibre from 18% to 5% and manmade yarn from 12% to 5%,” Ms. Sitharaman said.
- The inverted duty structure regarding the fertiliser will also be rectified, with the duty on sulphuric acid, nitric acid and ammonia being reduced from 18% to 5%.
- The special rate of 40% will apply only on particular sin and super-luxury goods such as pan masala, cigarettes, gutka, chewable tobacco, zarda, unmanufactured tobacco and beedi, as well as goods such as aerated water, caffeinated beverages, mid-size or large cars, motorcycles of engines exceeding 350cc, among others.
- On insurance services, individual life insurance policies and individual health policies will move to 0% from 18%.
- Ms. Sitharaman said that the GST rate on pan masala, gutka, cigarettes, chewable and unmanufactured tobacco, and beedi would remain at 28%, in addition to a compensation cess. Once the Centre discharges the loans it had borrowed to compensate States, these tobacco and tobacco-related items will move to the 40% slab.
Governors must act ‘forthwith’ on Bills, States argue in SC
Context: States ruled by non-BJP parties argued in the Supreme Court on Wednesday that even a three-month deadline given in the Tamil Nadu Governor case judgment may be too long, and State Bills presented to Governors must be assented to by these “titular heads” forthwith.
- West Bengal, Karnataka and Himachal Pradesh said the will of the people, which the proposed laws manifest, cannot be sacrificed on the altar of the whims and fancies of Governors. They said sitting over Bills was a quiet disguise for denying assent, but without necessarily having to return the proposed laws to the legislature for reconsideration.
- The three States said that if the Centre wanted them to presume that a high constitutional authority like the Governor would act with integrity while dealing with Bills, the same courtesy must be extended to State legislatures, which also happened to be high constitutional authorities.
- Appearing before a five-judge Presidential Reference Bench headed by Chief Justice of India B.R. Gavai, senior advocate Kapil Sibal, for West Bengal, said Article 200 required the Governor to return a Bill to a State Legislature “as soon as possible” in case he disagreed with it.
- Mr. Sibal interpreted “as soon as possible” to mean “forthwith or immediately”. “‘Forthwith’ must apply to Governors and President, who is actually the Union government, while dealing with grant of assent.
- Bills cannot wait,” he submitted. The Governor had no business questioning the constitutionality of Bills. He was bound to grant assent if the legislature re-passed them. Later, once the Bills are notified as laws, citizens could test their constitutionality in court, he said.
- He drew attention to Article 167, which made it the Chief Minister’s duty to apprise the Governor of laws being contemplated by the State Cabinet. This was done as a part of the pre-legislative process.
- The senior lawyer said the Chief Minister would meet the Governor for an informal interaction to discuss the crafting of a law and taking in suggestions. Later, once the Bill was passed by the legislature, the Governor was expected to give his assent.
- Besides, Mr. Sibal pointed to the proviso of Article 254(2) of the Constitution that allowed Parliament to neutralise a repugnant State law by “adding to, amending, varying or repealing” it.
- Justice Surya Kant observed the proviso acted as a “second filter” on State Bills.
- “But prevention is better than cure, no?” Justice Vikram Nath interjected.
- Mr. Sibal replied there was a presumption of constitutionality associated with Bills passed by the legislature. References to the President by Governors were once rare instances. “Now, Governors create conflict by sitting over Bills for years together. Their doubts about the constitutionality of Bills, especially in the case of re-passed Bills, is bogey… The power given to Governors to assent, withhold assent or refer State Bills to the President under Article 200 are not discretionary choices, but constitutional routes,” he responded.
- Karnataka, represented by senior advocate Gopal Subramanium, said State Legislatures cannot allow other constitutional authorities to invade upon their legislative powers. He noted that the Centre’s argument that the President and Governors have wide discretionary powers was “fundamentally flawed”.
- “In the parliamentary form of democracy, the aid and advice of the Cabinet is central. There cannot be a dyarchy within a State. Governors have to act under the aid and advice of the State government. Governance cannot happen in a constant state of conflict or threat of conflict,” Mr. Subramanium submitted.
- Advocate Anand Sharma, a former Union Minister, said neither the President nor Governors have any role in lawmaking.
Every fourth adult in State is hypertensive as per NFHS, says Health Minister
Context: Hypertension (high blood pressure) is a significant health concern in Karnataka, with the NFHS-5 report indicating a prevalence of around 25% for women and 26.9% for men in the above-15 age group, higher than the national average, said Health Minister Dinesh Gundu Rao.
‘Silent epidemic’
- The Minister, who inaugurated a sensitisation workshop on hypertension and other non-communicable diseases, said hypertension is a silent epidemic and if left unchecked, it leads to strokes, heart attacks, kidney failure, and premature deaths.
- “NFHS-5 findings show that every fourth adult in Karnataka is hypertensive. This means lakhs of people in our State are living at high risk of chronic illness and sudden medical emergencies, often without being aware of it. The economic burden is also significant – rising hospitalisations, loss of productivity, and financial strain on families,” the Minister said.
- Stating that it calls for urgent collective action – early detection, healthy lifestyle choices, and reliable treatment services, the Health Minister said, “Our government is committed to expanding screening, ensuring medicines at every Health and Wellness Centre, and driving community awareness campaigns.”
- He said the community-level screening under the National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) will be expanded. “Lifestyle interventions such as diet, exercise, and reduced salt intake will be promoted through awareness campaigns. Besides, we will ensure the availability of essential medicines and diagnostics for hypertension management at all Health and Wellness Centres,” he said.
In childhood
- Oncologist U.S. Vishal Rao, who spoke on childhood hypertension, said no State government is screening children for hypertension in schools. “Studies show a rising trend of hypertension in children, in both urban and rural areas. Factors such as obesity, consumption of oily and junk food, lack of awareness about disease status and sedentary lifestyle contribute to the high burden,” he added.
Total lunar eclipse on the intervening night of September 7 and 8
Context: A total lunar eclipse will occur on the intervening night of September 7 and 8, which will be visible from all parts of the country between 8.58 p.m. and 2.25 a.m.
- According to the Jawaharlal Nehru Planetarium, the penumbral eclipse will begin at 8.58 p.m. followed by the partial eclipse, which will commence at 9.57 p.m on September 7. It added that the total eclipse will begin at 11 p.m.
- While the maximum eclipse is at 11.41 p.m., the total eclipse will end at 12.22 a.m., the partial eclipse and penumbral eclipse will end at 1.26 a.m. and 2.25 a.m. respectively.
- Lunar eclipses occur on a full moon day when the Earth comes in between the Sun and the Moon and when all the three objects are aligned. There are three types of lunar eclipses: total, partial and penumbral.
- A total lunar eclipse will occur when the whole Moon comes under the umbral shadow of the Earth and the partial lunar eclipse occurs only when a part of the Moon comes under shadow of the Earth.
No special equipment
- The Jawaharlal Nehru Planetarium said that no special equipment is needed to view the lunar eclipse.
- “It is safe to view through the unaided eye. The public can view this eclipse from their respective places, provided the sky is clear. This eclipse is visible all over India,” it said.
- It further said that demonstration lectures about the lunar eclipse will be organised late in the evening of September 7 at the planetarium. “Any eclipse viewing activity will be subjected to sky conditions during the monsoon period,” it said.
Packaging of sugar in jute bags: HC declines to interfere with policy
Context: Observing that “a judge, based on inputs, cannot assume the role of a supreme adviser to the administration of policies governing innumerable activities of the State”, the High Court of Karnataka has declined to examine the issue on whether the presence of jute batching oil in jute bags, used for packing sugar, leads to any serious health hazard, as well as the correctness of the policy decision to use jute bags.
- The court stated that it is the Standing Advisory Committee (SAC), operating under the provisions of the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, and the experts who will examine the claim regarding the alleged presence of carcinogenic material in jute batching oil.
Not arbitrary
- Also, the High Court said that making sugar industries compulsorily use 20% jute bags for packing sugar cannot be termed as arbitrary when the apex court, several years ago, had upheld the legality of this policy when the sugar industry was mandated to use 100% jute bags for packing sugar.
- Justice M. Nagaprasanna made these observations while dismissing a petition filed by the South Indian Sugar Mills Association-Karnataka, Bengaluru, and the Indian Sugar Mills Association, New Delhi.
- The associations had questioned the notifications issued by the Ministry of Textiles under the 1987 Act, which mandated the use of 20% jute bags for packing sugar.
- Pointing out that it is for the first time that the petitioners have claimed before the court about certain reports with regard to the alleged presence of carcinogenic material in jute batching oil, the High Court said that it is not inclined to examine these reports as they have to be looked into by the SAC, which meets annually to decide on the use of jute bags.
- Justice Nagaprasanna said that “the jute batching oil, after its usage, is again covered by another thin layer to block perforation and pilferage of sugar or dropping out of sugar, causing moisture of sugar owing to its hygroscopic nature. Since this has been in usage, all of which can be analysed for the ensuing year by the SAC”.
- “By taking oath of office as a judge, an ordinary man turns himself into a man with magic wand and qualifies himself to be an unquestionable authority to advise on policies is inconceivable. It is further trite that the court would not sit in the armchair of those experts who have promulgated such policies and overrule them…,” the High Court observed while declining to accept that the policy on usage of jute bags effected the right of sugar industry to carry on their trade.
Jaishankar meets German Foreign Minister, pushes for EU-India FTA
Context: India and Germany committed on Wednesday to doubling trade and expediting efforts to complete the India-European Union Free Trade Agreement under negotiation, amid uncertainty over whether Europe would follow the U.S. in imposing secondary sanctions on countries for buying Russian oil.
- After talks with German Foreign Minister Johann Wadephul, External Affairs Minister S. Jaishankar said the two sides discussed the “twin challenges” of economic volatility and political uncertainty, a reference to the U.S. imposition of 50% tariffs and sanctions.
- Speaking at a press conference after the meeting, Mr. Wadephul called Russia and China the two biggest challenges to the international world order.
- “We would like the [India-EU FTA talks] to move to a decisive conclusion in the coming days,” Mr. Jaishankar said, referring to the next round of talks between trade negotiators. He added that an FTA would help stabilise the global economy as a “ballast which today the world economy really needs”.
- Indian and EU negotiators have fast-tracked their talks and expect to meet more regularly, possibly every month in order to reach the year-end deadline set by EU President Ursula Von der Leyen and Prime Minister Narendra Modi when they met in February this year. However, as with the India-U.S. trade negotiations, the two sides have differences over issues such as agricultural market access for food and dairy products.
- Another major issue may arise between the two sides if the EU leadership follows U.S. President Donald Trump in imposing secondary sanctions on Indian companies due to the purchase of Russian oil. On Friday, German Chancellor Friedrich Merz announced that Germany and France would push for the U.S. and the EU to enforce sanctions on “other nations whose purchases of oil and gas finance a large part of Russia’s war economy”.
- In New Delhi, Mr. Wadephul did not respond directly to a question about whether Germany would endorse the penalty tariffs against India, but said their intention was to ensure Russia would come to the negotiating table with Ukraine.
- “We have not used tariffs but sanctions that we have imposed on Russia so as to ensure that Russia which has to fund its war will be less able to do so”, he said, adding that while the EU countries did not want to stop countries from accessing the oil they need, Russia should not be able to use “detours” to sell its oil to Europe. In the last round of sanctions, the EU had banned trade with Nayara Energy, a consortium of Russian oil major Rosneft and other companies in India.
- The German Foreign Minister, who arrived in India a day after Mr. Modi’s meeting with Russian President Vladimir Putin and Chinese President Xi Jinping made international headlines, also lashed out at Russian and Chinese “aggression”, and said he welcomed Mr. Modi’s call for a ceasefire in Ukraine during his meetings.
- “China’s increasingly aggressive behaviour in the Indo-Pacific is cause for concern for both our countries,” Mr. Wadephul said, adding, “Security in the Indo Pacific is closely linked to security in Europe.
- Russia’s war of aggression, for us in Germany and Europe, remains the biggest challenge to our security policy.”
- Mr. Jaishankar sidestepped the comments by the German Minister, saying India believed that a “multi-polar world with strategic autonomy can best respond [to economic and political challenges] through more intensive consultations and cooperation among key member states”.
SC has championed the right to dignity through multiple judgments: CJI
Context: Chief Justice of India B.R. Gavai on Wednesday described human dignity as the “soul of the Constitution” which sources and binds together core values such as personal liberty, freedom to choose, equality and fraternity.
- The Supreme Court has championed the right to dignity through multiple judgments to better the lives of women, prisoners, ordinary workers, persons with disabilities, and other marginalised and minority groups over the decades, he said.
- Through its interpretations of the value of dignity, the Supreme Court has ensured that the Constitution remained a living instrument, capable of responding to evolving societal challenges while remaining faithful to its foundational values, the CJI said.
- Chief Justice Gavai was delivering the keynote address at the 11th Dr. L.M. Singhvi Memorial Lecture on “Human dignity as the soul of the Constitution: judicial reflections in the 21st century”.
- Lok Sabha Speaker Om Birla; senior advocate Abhishek Singhvi, MP; and Vice-Chancellor of the O.P. Jindal Global University C. Raj Kumar spoke on the occasion.
- The CJI said the court had intervened to declare human dignity as a “Constitutional value that remains inviolable, even within the confines of incarceration”.
‘Not just physical survival’
- Thus, the court’s interventions were not limited to ensuring physical survival of the affected persons, but its verdicts had touched upon broader conditions which would enable the aggrieved and disempowered sections of society to lead a life of self-respect, freedom, and opportunity, he said.
- “Human dignity is intrinsically connected to an individual’s autonomy and capacity to make decisions about their own life. It encompasses the freedom to exercise choice, personal agency, and self-determination,” Chief Justice Gavai said.
- India, EFTA trade pact to come into force from Oct. 1
- The free trade agreement between India and four-European nation bloc EFTA, which will come into force from October 1, will have legally binding provisions, Switzerland.
- “For the first time, India has laid down legally binding provisions on trade and sustainable development in a free trade agreement,” it said in a statement.
- The European Free Trade Association members are Iceland, Liechtenstein, Norway, and Switzerland.
Cabinet approves ₹1,500 cr. scheme for critical minerals recycling
Context: The Union Cabinet chaired by Prime Minister Narendra Modi approved a ₹1,500-crore incentive scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources.
- Recycling of critical minerals entails recovery of critical minerals from end-of-life products such as copper, lithium, nickel, cobalt and rare earth elements.
- The incentive would form part of the National Critical Mineral Mission (NCMM), which seeks to build domestic capacity and supply chain resilience in critical minerals.
- Set with a tenure of six years from FY2025-26 to 2030-31, e-waste, lithium-ion battery (LIB) scrap, and other stock as catalytic convertors in end-of-life vehicles would qualify as eligible feedstock.
- The scheme earmarks one-third of the total outlay to small and new beneficiaries although beneficiaries may include both large and established recyclers.
- The government has specified that incentives would be accorded to eligible entities for investments in new units as well as for expansion, modernisation or diversification of existing units.
At least 21,000 children disabled in Gaza war: UN
Context: At least 21,000 children in Gaza have been disabled since the war between Israel and Hamas began on October 7, 2023, a United Nations committee.
- Around 40,500 children have suffered “new war-related injuries” in the nearly two years since the war erupted, with more than half of them left disabled, said the UN Committee on the Rights of Persons with Disabilities.
- Reviewing the situation in the Palestinian territories, it said Israeli evacuation orders during the Army’s offensive in Gaza were “often inaccessible” to people with hearing or visual impairments, “rendering evacuation impossible”.
- “Reports also described people with disabilities being forced to flee in unsafe and undignified conditions, such as crawling through mud without mobility assistance,” it said.
- Meanwhile the committee said the restrictions on humanitarian aid being brought into the Gaza Strip were disproportionately impacting the disabled. “People with disabilities faced severe disruptions in assistance, leaving many without food, clean water, or sanitation and dependent on others for survival,” it said.
- The committee said 83% of disabled people had lost their assistive devices, with most unable to afford alternatives such as donkey carts.
- Iran increased uranium stock before Israeli strikes: IAEA
Context: A confidential report by the United Nations’ nuclear watchdog circulated to member states said on Wednesday that Iran increased its stockpile of uranium enriched to near weapons-grade levels before Israel launched its military attack on June 13.
- The report said that as of June 13, Iran had 440.9 kg of uranium enriched up to 60%, an increase of 32.3 kg since the IAEA’s last report in May. The report stated that this figure is “based on the information provided by Iran, agency verification activities between 17 May 2025 and 12 June 2025, and estimates based on the past operation.”
Should reservations exceed the 50% cap?
Context:
- The leader of the opposition in Bihar, Tejashwi Yadav, has declared that if voted to power, their alliance would increase reservation to 85%.
- In another development, the Supreme Court has issued notice to the Union government on a petition demanding the introduction of a ‘system’ similar to the ‘creamy layer’ for reservations among the Scheduled Castes (SC) and Scheduled Tribes (ST)
What are constitutional provisions?
- Articles 15 and 16 guarantee equality to all citizens in any action by the state (including admissions to educational institutions) and public employment respectively. In order to achieve social justice, these Articles also enable the state to make special provisions for the advancement of socially and educationally backward classes or Other Backward Classes (OBCs), SCs and STs. A brief summary of important developments with respect to reservations at the central level is provided in the Table. The reservation in the Centre at present stands as follows — OBCs (27%), SCs (15%), STs (7.5%) and for the Economically Weaker Section (EWS), 10%, resulting in a total reservation of 59.5%. The reservation percentages vary from State to State according to their demographic profile and policies.
What have courts ruled?
- The issue arises due to two ostensibly competing aspects of equality — formal and substantive. The Supreme Court in Balaji versus State of Mysore (1962) noted that reservations under Articles 15 and 16 for backward classes should be ‘within reasonable limits’ and should be adjusted with the interests of the community as a whole. The court further ruled that such special provisions for reservation should not exceed 50%. This is seen as an endorsement of formal equality where reservations are seen as an exception to equality of opportunity and hence cannot exceed 50%.
- Substantive equality on the other hand is based on the belief that formal equality is not sufficient to redress the difference between groups that have enjoyed privileges in the past and groups that have been historically underprivileged and underrepresented. A seven-judge Bench in State of Kerala versus N. M. Thomas (1975) have broached the aspect of substantive equality. The court in this case opined that reservation for backward classes is not an exception to equality of opportunity but is an assertion and continuation of the same. However, since the 50% ceiling was not a question before the court, it did not give a binding judgment on this aspect in the case.
- In the Indra Sawhney case (1992), a nine-judge Bench upheld the 27% reservation for OBCs. It opined that caste is a determinant of class in the Indian context. Further, in order to uphold the equality of opportunity, it reaffirmed the cap of 50% for reservation as held in the Balaji case, unless there are exceptional circumstances. The court also provided for the exclusion of a creamy layer within OBCs. In the Janhit Abhiyan case (2022), the court by a majority of 3:2 upheld the constitutional validity of the EWS reservation. It held that economic criteria could be a basis for reservation and opined that the 50% limit set in the Indra Sawhney case was meant for backward classes while the EWS reservation of 10% is for a different category among unreserved communities.
What are the competing arguments?
- Dr. B. R. Ambedkar in his Constituent Assembly speech in November 1948 justified the need to have reservations for backward communities that have been left out in the past. He also opined that reservations should be confined to a minority in order to uphold the guaranteed right of ‘equality of opportunity.’
- However, there has been a growing demand for increasing the reservation percentage beyond the judicial cap of 50% to reflect the proportion of backward classes in the population. The demand for a caste census has been strong in order to have actual data about this proportion rather than mere estimates. It must also be noted that as per various government replies in Parliament, 40-50% of seats reserved for OBCs, SCs and STs in the Central government remain unfilled.
- Another contentious issue relates to the concentration of reservation benefits. The Rohini Commission, set up for providing recommendations on the sub-categorisation among OBC castes, has estimated that 97% of reserved jobs and seats in educational institutions have been garnered by just around 25% of the OBC castes/sub-castes at the central level.
- Close to 1,000 of around 2,600 communities under the OBC category have had zero representation in jobs and educational institutes.
- A similar issue of concentration of reservation benefits persist in SC and ST categories as well. There is no exclusion of ‘creamy layer’ for these communities. In State of Punjab versus Davinder Singh (2024), four judges of a seven-judge Bench impressed upon the Central government the need to frame suitable policies for the exclusion of ‘creamy layer’ in SC and ST reservations. However, the Central government in a cabinet meeting in August 2024 reaffirmed that the ‘creamy layer’ does not apply to reservations for SCs and STs.
- Critiques who are against the extension of a ‘creamy layer’ to SCs and STs argue that the vacancies for these communities are anyway not fully filled. Therefore, the question of a ‘creamy layer’ within such communities usurping the opportunities of even more marginalized castes does not arise. It is also likely that the exclusion of a ‘creamy layer’ based on any criteria will result in an even more increased backlog of vacancies. There is also a fear that such backlog vacancies may be converted in the long run to unreserved seats thereby depriving the SCs and STs of their rightful share of opportunities.
What can be the way forward?
- Right to equality of opportunity is a fundamental right and an increase in reservation up to 85% may be seen as violating such right.
- Nevertheless, substantive equality through affirmative action is required to uplift the underprivileged. Based on empirical data of the ensuing Census in 2027, which will also enumerate backward castes, there must be wide ranging discussions with all stakeholders to arrive at a suitable level of reservation. Equally important is to implement sub-categorisation among the OBCs as per the Rohini Commission report based on Census data. With respect to SCs and STs, as demanded in the plea before the Supreme Court, a ‘two-tier’ reservation system may be considered. Under such a scheme, priority would be given to more marginalised sections before extending it to those who are relatively well-off within those communities. These measures would ensure that benefits of reservation reach the more marginalised among the underprivileged in successive generations.
- It must also be borne in mind that considering the opportunities available in the public sector and the young population of our country, any scheme of reservation would not meet the aspirations of large sections of the society. There must be sincere efforts to provide suitable skill development mechanisms that would enable our youth to be gainfully employed.