GST Revamp 2025: Full List of What Gets Cheaper and Costlier From September 22
GST Council revamps tax slabs from September 22, 2025. Essentials, medicines, appliances, and small vehicles get cheaper, while luxury cars, aerated drinks, tobacco, and gaming services face 40% GST. Full list here.
From September 22, 2025, essentials and healthcare get cheaper while luxury cars, soft drinks, and tobacco attract 40% GST under India’s new tax regime.
India's Goods and Services Tax (GST) system is set for its biggest change since 2017. Following a meeting of the GST Council, a major overhaul has been approved, simplifying the tax structure to just two main slabs: 5% and 18%. This new system, effective September 22, 2025, aims to lower prices on many essential goods and services while increasing taxes on luxury and "sin" items.
A special 40% slab has been created for a select few products, including high-end cars and certain tobacco items.
What Becomes Cheaper?
Everyday Items and Household Goods
Food and Beverages: Items like ultra-high temperature milk, paneer, and pizza bread will now be tax-free. Common food items such as butter, ghee, dry nuts, condensed milk, and biscuits will see their GST rate drop from 18% to 5%.
Personal Care: Many daily essentials will be more affordable, with tax on products like shampoo, toothpaste, face powder, and hair oil reduced from 18% to 5%.
Appliances: Consumer electronics, including air conditioners, dishwashers, and TVs, will now be taxed at 18%, down from 28%.
Healthcare
Medicines and Medical Devices: Life-saving drugs and most medical devices will see their tax rates cut from 12% or 18% to 5% or even zero. This includes thermometers, diagnostic kits, glucometers, and corrective spectacles.
Insurance: In a landmark decision, all individual life and health insurance policies will now be completely tax-exempt.
Transportation
Cars: Small cars, including petrol, LPG, CNG (under 1,200 cc) and diesel (under 1,500 cc) models, will see their GST cut from 28% to 18%.
Motorcycles: Bikes with engines up to 350 cc will also get a tax cut, from 28% to 18%.
Flights: Economy class air tickets will now be taxed at just 5%.
Other Sectors
Construction: Cement will become cheaper as its tax rate is lowered from 28% to 18%.
Agriculture: Many farming-related goods, from machinery to fertilizers and pesticides, will see tax reductions from 12% or 18% to 5%.
Wellness Services: Services from health clubs, salons, gyms, and yoga centers will now be taxed at a much lower 5%, down from 18%.
What Becomes Costlier?
Beverages
Aerated and Caffeinated Drinks: Popular soft drinks, along with other non-alcoholic beverages with added sugar, will now be taxed at 40%, up from 28%.
Vehicles and Luxury Items
High-End Cars: All automobiles with engines larger than 1,200 cc or longer than 4,000 mm will face a 40% GST levy. This also applies to motorcycles above 350 cc, yachts, personal aircraft, and racing cars.
Entertainment and Gambling
Leisure Activities: Services at casinos, horse racing clubs, and online gaming platforms will be taxed at 40%. This also includes tickets to events like the IPL.
Tobacco
While an immediate change is not expected, tobacco products are set to eventually move to a 40% GST rate once the government's outstanding compensation cess loans are repaid.
