By Arul Rajadurai

NewsGate Press Network

GST Exemptions: The Politics of Compassion in Taxation

When the Goods and Services Tax (GST) was unfurled in 2017, it was hailed as the most ambitious tax reform since Independence by the policy makers. Its architects promised a seamless national market integration and the removal of cascading taxes that had long distorted inter-state commerce. It also triggered anxieties that essentials would become more expensive? Would the poor, who spend the largest share of their income on their undeniable demands such food, bear the unintended smash?

The subsequent revisions over the period and particularly the recent exemptions and the zero per cent slab have quietly but significantly reshaped the empathetic social face of GST. What was once dismissed as a technocratic exercise in harmonisation has, through these revisions, evolved into a policy that also acknowledges apperception.

Shielding the Household Kitchen

The Indian kitchen has long been the barometer of inflation. By exempting unbranded cereals, pulses, flour, fresh vegetables, milk, and eggs, the GST Council signalled that the everyday meal would not be hostage to tax design.

For the lower- and middle-income household, this is not an abstract relief. On an average monthly grocery bill of Rs. 8,000 – Rs. 10,000 in urban India, nearly 60–65% comprises food grains, dairy, vegetables, and pulses were all kept outside the GST net. Having these items placed in nil or exempted, every Indian family would save an additional Rs. 500 – Rs. 700 every month, or close to Rs. 6,000 annually. In rural households, where food shares an even larger portion of expenditure, the savings are proportionately higher. It preserved affordability while safeguarding the reform’s social acceptability.

Upholding Gender Equality while Correcting Historical Blind Spots

Few policy moves captured the symbolic power of tax exemptions as forcefully as the removal of GST on sanitary napkins. For decades, menstrual hygiene products had been categorised as taxable commodities, inadvertently deepening gender inequities. By placing them in the nil slab, the council not only reduced financial barriers but also acknowledged a silent stigma.

A similar calculation holds here: a family with two adolescent daughters may spend around Rs. 2,000 annually on sanitary products. At the earlier 12% rate, this meant an avoidable tax burden of Rs. 240 a year which is not insignificant in households struggling with limited disposable incomes.

Protecting Craft and Culture while uplifting rural artisans

India’s khadi, handlooms, and handicrafts are not merely goods; they are carriers of cultural memory and sources of rural and underprivileged livelihood. By exempting or lowering the tax burden on these products, the revised GST system implicitly recognised their fragility or intricacy.

For artisans competing with mechanised mass production, the removal of GST was not a symbolic gesture; it was a slender lifeline. It allowed handwoven sarees in Kanchipuram, wooden toys in Channapatna, and carpets in Bhadohi to remain affordable, thereby sustaining both heritage and employment. For consumers, this translated into at least a 5–12% price moderation, keeping traditional goods within reach of middle-class households.

The Quiet Economics of GST Exemptions

It is easy to frame GST in the language of compliance and fiscal targets. Yet for the consumer, its most tangible success lies in what is not taxed. A child’s schoolbook, a litre of milk, a bar of khadi soap, or a packet of jaggery are part of the cumulative effect of these exemptions is felt not in statistics but in the dignity of daily life.

On average, a middle-income family of four saves between Rs. 6,000 – Rs. 8,000 annually because of the 0% GST category where the money can cover school fees, a medical emergency, or a month’s rent in smaller towns. In aggregate terms, these exemptions channel tens of thousands of crores of purchasing power back into households every year, indirectly fuelling consumption.

By taxing luxury and non-essential consumption while sparing subsistence, policymakers struck a balance between fiscal prudence and distributive justice.

This is not without cost. Exemptions narrow the tax base and complicate administration. Yet they also expand the moral base of taxation, ensuring that GST is not perceived merely as an extractive instrument but as a calibrated reform sensitive to India’s social realities.

The evolution of GST demonstrates that the measure of a tax system lies not only in its efficiency but also in its humanity. By shielding essentials, correcting past blind spots, and protecting fragile livelihoods, the revised GST has attempted to balance governance with social conscience.

For households, the relief translates into a tangible saving each year. For the nation, it translates into something less quantifiable but far more enduring: trust in its ability to temper fiscal power with empathy.