New Delhi, Sep 21 The Goods and Services Tax (GST) reforms, which kick in from Monday (September 22), represent a landmark step in reshaping India’s taxation system to better serve the aspirations of the country’s youth and create more job opportunities for them in MSMEs and startups, according to an official statement issued on Sunday.
Sectors with high youth participation -- such as education, automobiles, technology, handicrafts, footwear, healthcare, food processing, and textiles -- have been prioritised to lower costs, boost competitiveness, and encourage innovation. Beyond reducing the financial burden on households and businesses, the reforms strengthen India’s vision of inclusive growth, sustainability, and empowerment of the next generation, the statement said.
The government has introduced a simplified GST structure with significant rate reductions across key sectors of trade and commerce. Essential industries such as leather, footwear, paper, textiles, handicrafts, toys, packaging, and logistics have been covered under this reform. The aim is to boost the present businesses and startups and incentivise the youth to enter into businesses and initiate startups, the statement explained.
GST has been reduced from 12 per cent to 5 per cent on chamois leather, composition leather with a basis of leather or leather fibre, and leather prepared after tanning or crusting. Besides, footwear priced up to Rs 2,500 per pair now attracts just 5 per cent GST, directly benefiting young consumers. Similarly, GST on the supply of job work in relation to hides, skins, and leather has also been cut from 12 per cent to 5 per cent, reducing MSME production costs, which will encourage young entrepreneurs.
GST rate cuts also cover agro-based and eco-friendly wood substitutes, encouraging sustainable manufacturing and MSME competitiveness. GST has been reduced from 12 per cent to 5 per cent on rice husk board, glassfibre reinforced gypsum board, cement bonded particle board, jute particle board, bagasse board, sisal fibre board, etc. The aim is to support MSMEs in wood manufacturing and promote eco-friendly alternatives.
The handicrafts sector, vital for young artisans and exporters, benefits from tax rationalisation, making traditional goods more affordable and globally competitive. These include a GST rate cut from 12 per cent to 5 per cent on idols made of wood, stone, and metals. This rate cut also applies to paintings, drawings, original engravings, handcrafted candles, carved wood products, handbags, including pouches and purses, stone art ware, stone inlay work, tableware and kitchenware of clay and terracotta. These reforms strengthen India’s cultural economy and young artisanal livelihoods.
The GST rationalisation in textiles removes structural anomalies, reduces costs, boosts demand, supports exports, and sustains jobs. GST on man-made fibres (MMF) reduced from 18 per cent to 5 per cent. GST on ready-made apparel up to Rs 2,500 per piece (earlier limit was Rs 1,000) is set at 5 per cent.
The rate cut will make Indian MMF-based garments more price-competitive in global markets, supporting India’s ambition to become a global textile hub. It will support budding and young exporters, the statement explains.
Education, nutrition, care, and play form the foundation of every child’s development. The recent GST rationalisation measures are a path-breaking step towards making learning, mobility, and childcare more affordable for families across India.
GST on pencils, sharpeners, crayons, exercise books, graph books, maps, and charts has been reduced from 12 per cent to Nil. GST on erasers has been reduced from 5 per cent to Nil. This reduction will make basic learning tools cheaper, especially for government schools, children and youth in rural areas. It reduces out-of-pocket education expenses for families, encourages higher school enrolment, and supports better learning outcomes. At the same time, it boosts demand for domestic stationery manufacturing, particularly among MSMEs.
GST on bicycles has been reduced from 12 per cent to 5 per cent. This will make bicycles more affordable and will help children in rural and semi-urban areas access schools more easily.
Besides, GST on gyms and fitness centres has been reduced from 18 per cent to 5 per cent. The reduction of GST on fitness centres marks a decisive step towards building a healthier and more active India. Fitness, which was earlier considered a luxury by many, is now being made accessible to wider sections of society. This aligns with the broader public health agenda of preventive care and wellness promotion, especially among the youth.
The reduced GST makes gyms and fitness memberships more affordable, encouraging more people, especially youth and middle-class families, to access structured health and wellness services, the statement added.
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