New Delhi, Sep 4 (PTI) With the GST Council approving a complete overhaul of the Goods and Services Tax (GST) regime, senior Congress leader and former finance minister P Chidambaram on Thursday described it as a "U-turn" and said one is left with the thought that these steps are eight years too late.

Common use items from roti/paratha to hair oil, ice creams and TVs will cost less, while tax incidence on personal health and life insurance will be brought down to nil after the all-powerful GST Council on Wednesday approved a complete overhaul of the tangled Goods and Services Tax (GST) regime.

The GST Council approved limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri.

In a statement, Chidambaram said, "GST rationalisation and reduction of the rates are welcome, but one is left with the thought that these steps are eight years too late." Congress, many economists and the middle and poorer sections of the people have, for years, pointed out that the design of the GST and the initial rates were wrong, but the government turned a deaf ear, the Congress leader said.

"I am happy that the government has realised that the path on which they had walked for 8 years was wrong, and done a U-turn," Chidambaram said.

It should have always been a 'Good and Simple Tax', he said.

The middle and poor classes will heave a sigh of relief, Chidambaram said.

"The government and, in particular, the FM (Nirmala Sitharaman) had defended the flawed design and the complicated multiple rates so far. It is heartening to see the FM and other government leaders applauding the changes made yesterday!" the Congress MP said in his statement on Thursday.

In a post on Wednesday night, Chidambaram said, "The GST rationalisation and the reduction in rates on a range of goods and services are WELCOME but 8 years TOO LATE." The current design of GST and the rates prevailing until today ought not to have been introduced in the first place, he said.

"We have been crying hoarse for the last 8 years against the design and rates of GST, but our pleas fell on deaf years. It will be interesting to speculate on what drove the government to make the changes: Sluggish growth? Rising household debt? Falling household savings? Elections in Bihar? Mr Trump and his tariffs? All of the above?" he said.

Almost all personal-use items and aspirational goods for the middle class, like AC, washing machines, will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.

Premium paid for individual life insurance and health insurance (including family floater), policies too have been exempted from GST.

Earlier, such policies were subject to 18 per cent GST.

Briefing reporters after a marathon day-long GST Council meeting, Union Finance Minister Nirmala Sitharaman on Wednesday said all decisions were taken unanimously, with no disagreement with any state.

The panel approved simplifying the GST from the current four slabs - 5, 12, 18 and 28 per cent, to a two-rate structure - 5 and 18 per cent. A special 40 per cent slab is also proposed for a select few items such as high-end cars, tobacco and cigarettes.

The new rates for all products, except pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi, will be effective September 22, she said. PTI ASK HIG HIG

GST rate rationalisation simplifies tax structure and exempts personal insurance, lowering burdens on common consumer goods. GST has been restructured from a multipart slab system to a simplified two rate model with a separate high rate category for select luxury and tobacco items; many household and aspirational goods will see reduced tax incidence and premiums for individual life and health insurance have been exempted from GST, with the Council reporting unanimous approval and a near term prospective implementation except for specified tobacco products.