GST Rate Revision 2025: In a historic move, the GST Council has overhauled the tax structure during its 56th meeting held in New Delhi. Chaired by Finance Minister Nirmala Sitharaman, the council approved the removal of the 12% and 28% tax slabs, simplifying the structure to just two main slabs—5% and 18%.
The new rates will take effect from September 22, 2025 (Navratri Day), bringing significant relief on nearly 175 items. Essential goods like groceries, medicines, cement, and small cars will now become cheaper, while tobacco products, soft drinks, and luxury vehicles will attract higher taxes.
What Gets CheaperDaily Essentials:
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Zero GST: Milk products such as paneer, pizza bread, parathas, khakhra, and roti will now be tax-free.
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Reduced to 5%: Butter, ghee, jams, sauces, soups, pasta, namkeen, biscuits, and confectionery will now attract only 5% GST, compared to the earlier 12–18%.
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Dry Fruits: Almonds, pistachios, cashews, dates, and citrus fruits will now be taxed at just 5%.
Healthcare Relief:
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Life-saving medicines like Agalsidase beta, Onasemnogene, Daratumumab, and Alectinib will now be completely tax-free.
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Most medicines, medical equipment, diagnostic kits, bandages, thermometers, and oxygen equipment will attract only 5% GST, instead of 12–18%.
Personal Care & Household Goods:
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Items like hair oil, shampoo, toothpaste, soaps, shaving kits, talcum powder, toothbrushes, candles, and matchsticks will now fall under the 5% slab.
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Stationery such as notebooks, pencils, sharpeners, crayons, and erasers also get cheaper.
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Toys, handicrafts, bamboo furniture, and handmade shawls will attract just 5% GST.
Transport & Housing:
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Cement GST reduced from 28% to 18%, boosting housing and infrastructure.
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Vehicles: Tractors, bicycles, bikes under 350cc, small cars (up to 1500cc and 4m length), electric vehicles, hybrids, and ambulances will now be taxed at lower rates.
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Eco-friendly construction materials like particle boards made from crop residue, granite, and marble blocks will attract only 5% GST.
Tobacco & Sin Goods:
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Pan masala, gutkha, chewing tobacco, and cigarettes will now attract 40% GST, up from 28%.
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Sugary soft drinks, caffeinated beverages, and fizzy fruit drinks will also move to the 40% slab.
Luxury Products:
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SUVs and large cars with engines above 1200cc/1500cc will be taxed at 40%.
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Motorcycles above 350cc, private jets, yachts, revolvers, and pistols will also see a sharp hike.
Other Hikes:
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Coal, lignite, and peat now taxed at 18% (earlier 5%).
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Biodiesel not blended with diesel raised from 12% to 18%.
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Expensive apparel above ₹2,500, premium textiles, luxury quilts, and certain paper products like kraft and uncoated paper will also move to the 18% slab.
The new structure is designed to ease household budgets while keeping luxury consumption in check. Essentials like food, medicines, and housing materials are now significantly cheaper, directly benefiting middle-class families.
At the same time, harmful products like tobacco and luxury indulgences face higher taxes, helping the government balance revenue after reducing GST on essentials.
Experts believe this reform will:
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Boost consumption of everyday goods
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Support healthcare affordability
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Encourage eco-friendly housing and transport
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Discourage spending on tobacco and luxury items
✅ Bottom Line: Starting September 22, 2025, GST in India will operate under just two slabs—5% and 18%. Families will save more on groceries, medicines, cement, and small vehicles, while sin goods and luxury products will become costlier.
This is one of the most significant tax reforms since GST was launched in 2017, promising direct relief to households while strengthening India’s consumption-driven economy.
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