SDG 8: Decent Work & Economic Growth | SDG 9: Industry, Innovation & Infrastructure
Institutions: Ministry of Finance | GST Council | Government of Sikkim
The GST rationalisation reforms are expected to deliver notable benefits in Sikkim, especially across tourism, pharmaceuticals, specialty tea, and food processing sectors. Key changes:
Tourism & hospitality: Hotel rooms up to ₹7,500/night now attract only 5% GST; wellness & spa services’ rate reduced from 18% to 5%, boosting affordability and stay lengths.
Pharmaceuticals & medicines: Zero GST on 30 major cancer drugs; most other drugs and medical devices moved from 12% to 5% GST.
Specialty goods: Products like Temi tea, Dalle chilli, local handicrafts now carry lower GST (5%) instead of 18%, increasing price competitiveness in domestic & export markets.
Food processing & agriproducts: Pickles, packaged juices, sweets etc. reduced from 12% / 18% to 5% GST—translating to consumer price drops of 6–13%.
Industrial & export impact: With lower GST, pharma and tea exports from Sikkim could gain cost advantage, supporting more competitiveness in global markets.
These sectoral reliefs aim not just at tax cuts but at creating growth impulses in Sikkim’s economy: by attracting investment in pharma, enhancing tourism, and boosting rural livelihoods through food processing. The factsheet illustrates how states with niche products can strategically benefit from federal reforms.
What is GST Rationalisation? → The process of adjusting GST rates to better reflect economic priorities, reduce tax distortions, and simplify compliance.
Relevant Question for Policy Stakeholders: Can states with niche strengths (like Sikkim’s pharmaceuticals, high-altitude agriculture, and wellness tourism) replicate this GST reform playbook, and what support will they need to scale from local to national markets?
Follow the full factsheet here: PIB Id 150310