New Delhi [India], September 4 (ANI): Delhi Minister Manjinder Singh Sirsa on Thursday welcomed the GST council's decision to cut Goods and Services Tax (GST) rates, calling it a 'big gift' from Prime Minister Narendra Modi to the common people ahead of Diwali.

Speaking to ANI, Manjinder Singh Sirsa said, 'I thank the Prime Minister and the GST reforms are historical. Health and life insurance premiums, earlier taxed at 18%, are now exempt.'

Sirsa said this reform will provide a significant boost to the nation's economy.

'This is historic. This is a big gift of PM Modi to the common man before Diwali. This will provide a significant boost to the nation's economy...The opposition has no vision. Lakhs of industrialists of Delhi will benefit from it,' Sirsa said.

Finance Minister Nirmala Sitharaman on Wednesday announced a sweeping reduction in GST, aimed at providing relief to households, farmers, businesses and the healthcare sector.

The 56th GST council meeting decided to rationalise GST rates to two slabs of 5 per cent and 18 per cent by merging the 12 per cent and 28 per cent rates.

5% slab consists of essential goods and services, including food and kitchen item like butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujia, mixtures, and utensils; agricultural equipment like drip irrigation systems, sprinklers, bio-pesticides, micronutrients, soil preparation machines, harvesting tools, tractors, and tractor tires; handicrafts and small industries like sewing machines and their parts and health and wellness like medical equipment and diagnostic kits.

While the 18% slab consists of a standard rate for most goods and services, including automobiles such as small cars and motorcycles (up to 350cc), consumer goods like electronic items, household goods, and some professional services, a uniform 18% rate applies to all auto parts.

Additionally, there is also a 40% slab for luxury and sin goods, including tobacco and pan Masala, products like cigarettes, bidis, and aerated sugary beverages and on luxury vehicles, high-end motorcycles above 350cc, yachts, and helicopters.

Moreover, some essential services and educational items are fully exempted from GST, including individual health, family floater and life insurance, no GST on health and life insurance premiums and education and healthcare, like certain services related to education and healthcare are GST-exempt. (ANI)