![GST Rate Overhaul 2025: What’s Cheaper and What’s Costlier? [Full List]](https://theradical.in/wp-content/uploads/2025/09/gst-rate-overhaul-2025-whats-cheaper-costlier.jpg)
New 2-Slab GST Structure to Boost Spending and Ease Costs for Households, Farmers & Small Businesses
In a landmark move, the GST Council of India has announced a comprehensive revamp of the Goods and Services Tax (GST)—the most significant reform since its launch in 2017. The overhaul introduces a simplified two-slab system, cutting tax rates on essential goods and services while increasing levies on luxury items, carbonated drinks, and tobacco products.
The new GST rates will take effect from September 22, 2025, and are expected to stimulate domestic consumption, support small-scale industries and agriculture, and promote tax efficiency.
What’s Changed in the GST Structure?
| Previous Slabs | New Structure (2025) |
|---|---|
| 5%, 12%, 18%, 28% | 5% and 18%, with a special 40% slab for sin/luxury goods |
Special 40% GST applies to high-end items such as luxury cars, tobacco, sugary beverages, and gambling services.
What’s Cheaper After GST Revamp (2025)
Cheaper Items Table
| Category | Item(s) | Old GST Rate | New GST Rate |
|---|---|---|---|
| Food & Beverages | Chapati, paranthas, UHT milk, paneer, pizza bread, khakra | 5% | 0% |
| Butter, ghee, dry nuts, ice cream, pastries, biscuits, jam, fruit juice, sugar confectionery | 18% | 5% | |
| Cheese, cooking fats | 12% | 5% | |
| Plant-based milk, soya milk | 12–18% | 5% | |
| Household Essentials | Tooth powder, feeding bottles, utensils, bicycles, combs, bamboo furniture | 12% | 5% |
| Shampoo, toothpaste, soaps, toothbrushes, face powder, hair oil | 18% | 5% | |
| Appliances | ACs, dishwashers, televisions | 28% | 18% |
| Stationery | Pencils, erasers, crayons, exercise books, maps, charts, globes | 5–12% | 0% |
| Footwear & Textiles | Standard footwear, clothing items | 12% | 5% |
| Healthcare | Medical oxygen, diagnostic kits, thermometers, glucometers, life-saving drugs | 12–18% | 0–5% |
| Health & life insurance | 18% | 0% | |
| Insurance Services | Goods carriage insurance | 12% (with ITC) | 5% (with ITC) |
| Hotels & Flights | Hotel rooms up to ₹7,500 | 12% | 5% (no ITC) |
| Economy flight tickets | 12% | 5% | |
| Vehicles | Motorcycles ≤ 350cc | 28% | 18% |
| Electric vehicles, small hybrid cars | 5% | 5% (unchanged) | |
| Auto Components | Brakes, gearboxes, axles, tyres, etc. | 28% | 18% |
| Construction | Cement | 28% | 18% |
| Sewing machines & parts | 12% | 5% | |
| Agricultural Equipment | Tractors, hand pumps, drip nozzles, threshers, harvesters | 12% | 5% |
| Tractor components, diesel engines (>250cc), hydraulic pumps | 18% | 5% | |
| Fertilizer Inputs | Sulphuric acid, nitric acid, ammonia | 18% | 5% |
| Micronutrients under Fertilizer Control Order | 12% | 5% | |
| Biopesticides | Neem-based pesticides, Bacillus thuringiensis, Trichoderma, NPVs | 12% | 5% |
| Beauty & Wellness | Gym, yoga, salon, spa, fitness services | 18% | 5% (no ITC) |
What’s Costlier After GST Revamp (2025)
Costlier Items Table
| Category | Item(s) | Old GST Rate | New GST Rate |
|---|---|---|---|
| Soft Drinks & Beverages | Aerated drinks (Coca-Cola, Pepsi), caffeinated & sugary beverages | 18–28% | 40% |
| Luxury Vehicles | Cars >1,200cc or >4,000mm, motorcycles >350cc, yachts, racing cars, private aircraft | 28% | 40% |
| Tobacco Products | Cigarettes, bidis, gutkha, chewing tobacco | 28% + cess | 40% (post-repayment of COVID loan) |
| Gambling & Leisure | Casinos, horse racing, online betting, lotteries, race clubs, IPL tickets | 28% | 40% |
Implementation Date
All revised GST rates will be applicable from: September 22, 2025
Note: Items like pan masala, gutkha, bidi, and tobacco products remain in separate categories until compensation loans are fully repaid.
A Balanced GST Overhaul Aiming for Growth and Fairness
The latest GST reform signals a strong push toward economic simplification and equity. By making everyday essentials cheaper and taxing luxury and sin goods higher, the new system supports lower-income households, farmers, healthcare, and small businesses—while also encouraging responsible consumer behavior.
As India adapts to this new regime starting September 22, 2025, consumers and industries alike should review their tax implications, update pricing strategies, and align their supply chains accordingly.
This balanced yet bold reform is expected to boost consumption, enhance tax compliance, and lay the foundation for a more inclusive and growth-oriented economy.
Also Read : Big GST Relief for Businesses: Faster Registrations, Lower Taxes on the Way!
