The GST Council’s September 2025 revamp slashes rates on essentials like food, insurance, and household items to 0% and 5%, while luxury cars, tobacco, and sin goods now fall under a 40% slab. Check the full list of what’s cheaper and what’s costlier.
GST New Rates 2025: GST Slabs at a Glance (Effective September 22, 2025)
| GST Slab | Items Covered |
|---|---|
| 0% (Nil Tax) | Chapati, paratha, paneer, Indian breads, individual life & health insurance |
| 5% | Butter, ghee, dry nuts, jam, biscuits, ice cream, corn flakes, cereals, sausages, juices, 20L bottled water, shampoo, soap, toothpaste, hair oil, talcum powder, feeding bottles, kitchenware, bicycles, umbrellas, bamboo furniture |
| 18% | Cement, small cars (≤1,200cc petrol/≤1,500cc diesel), air-conditioners, dishwashers, TVs, motorcycles ≤350cc |
| 40% (Luxury & Sin Goods) | Cars >1,200cc (petrol)/>1,500cc (diesel) & length >4,000 mm, motorcycles >350cc, yachts, private aircraft, racing cars, premium automobiles, tobacco & cigarettes, luxury items |
GST New Rates 2025: What’s Cheaper, What’s Costlier
Finance Minister Nirmala Sitharaman on Wednesday announced sweeping changes to the Goods and Services Tax (GST), effective September 22, 2025 – the first day of Navratri.
The GST revamp simplifies tax rates by pushing most items into the 5% and 18% slabs, making essentials more affordable while placing luxury and sin goods under a 40% tax slab.
This reform comes as welcome news for the common man and middle class, with household items, food products, and personal care goods becoming significantly cheaper.
GST New Rates 2025: What Gets Cheaper
Essential Food Items (0% Tax)
- All varieties of chapati and paratha (reduced from 5%)
- Paneer, Indian breads, and other basic food staples
Everyday Food & Beverages (Reduced to 5% from 18%)
- Butter, ghee, dry nuts, condensed milk.
- Sausages, meat, sugar confectionery.
- Jam, jellies, tender coconut water.
- Namkeen, 20-litre bottled drinking water.
- Fruit pulp, juices, milk-based beverages.
- Ice cream, pastries, biscuits, corn flakes, cereals, sugar sweets.
Household Items (Reduced to 5% from 12%)
- Tooth powder, feeding bottles.
- Tableware, kitchenware, utensils.
- Umbrellas, bicycles, bamboo furniture, combs.
Personal Care (Reduced to 5% from 18%)
- Shampoo, soap, hair oil.
- Toothpaste, toothbrushes.
- Talcum powder, face powder.
Insurance
- Individual life and health insurance policies will now be tax-free, encouraging wider adoption.
Construction & Vehicles
- Cement: Reduced from 28% to 18%.
- Small vehicles:
- Petrol, LPG, CNG cars ≤1,200 cc & ≤4,000 mm length.
- Diesel cars ≤1,500 cc & ≤4,000 mm length.
- Tax reduced to 18%.
- Petrol, LPG, CNG cars ≤1,200 cc & ≤4,000 mm length.
Consumer Durables (Reduced to 18% from 28%)
- Air conditioners
- Dishwashers
- Televisions
- Motorcycles up to 350 cc
Electric Vehicles
- Retain existing 5% GST rate.
GST New Rates 2025: What Gets Costlier
Automobiles (40% Tax)
- Cars above 1,200 cc (petrol) and 1,500 cc (diesel) with length >4,000 mm
- Motorcycles above 350 cc
- Personal yachts and aircraft
- Racing cars
Luxury & Harmful Goods (40% Tax)
- Premium automobiles
- Tobacco and cigarettes
- Select luxury products
Note: Tobacco, Gutkha, and related products will continue under the existing 28% tax + compensation cess until loans taken for state revenue loss compensation are fully repaid.
GST New Rates 2025: Effective Date
- The revised GST rates will take effect from September 22, 2025, except for Gutkha, Tobacco, and related products, which will temporarily retain the older tax structure.
GST New Rates 2025 – Wrapping Up
- This GST adjustment brings tangible relief to households with cheaper food items, daily essentials, and personal care products. At the same time, it raises levies on luxury and sin goods to maintain fiscal balance.
- With Navratri marking the rollout, the reform is poised to give festive shoppers and the middle class plenty of reasons to celebrate.
GST New Rates 2025: Why You Should Register Now
- With the GST New Rates 2025 coming into effect from September 22, essentials like food, insurance, and daily-use products are now cheaper at 0% or 5% GST, while luxury cars, tobacco, and high-end goods fall under the 40% slab.
- If you are running a business and haven’t registered for GST yet, this is the right time. GST registration ensures legal compliance, allows you to claim input tax credit, and builds trust with customers. The new rate structure makes it even more important for small and medium businesses to be part of the GST system.
| Official GST Portal to Register | Click Here |
GST New Rates 2025 – FAQ
1. What are the new GST slabs after September 2025?
Ans: The GST Council has simplified rates into four categories: 0% (nil tax), 5%, 18%, and 40% (luxury & de-merit goods).
2. Which items will be tax-free (0% GST)?
Ans: Basic essentials like chapati, paratha, paneer, Indian breads, and individual life & health insurance policies are now tax-free.
3. What has become cheaper under the new GST rates?
Ans: Daily-use items like butter, ghee, biscuits, jam, shampoo, soap, toothpaste, bicycles, kitchenware, and cement now fall under the 5% or 18% slabs, making them cheaper.
4. What items will get costlier after GST changes?
Ans: Luxury cars, motorcycles above 350cc, yachts, private aircraft, and tobacco products are in the 40% tax slab, making them more expensive.
5. Does 40% GST mean prices rise by 40%?
Ans: Not exactly. It means the GST charged is 40% of the product’s value. For example, on a ₹10 lakh car, ₹4 lakh tax will be added, making it ₹14 lakh before other charges.
6. From when will the new GST rates apply?
Ans: The revised GST rates will be effective from September 22, 2025, except tobacco and related products, which will temporarily continue under the old structure.
7. Will GST on electric vehicles change?
Ans: No. Electric vehicles continue to attract 5% GST, the same as before.
8. What is the benefit of GST cuts for households?
Ans: Families will save money as food, daily essentials, household goods, and personal care items now have lower taxes.
9. How will businesses benefit from the GST changes?
Ans: Businesses, especially in FMCG, insurance, and construction, will see improved demand due to reduced taxes on essentials and cement.
10. Why has GST on luxury and harmful goods increased?
Ans: Higher GST on luxury cars, tobacco, and harmful products is aimed at discouraging consumption and balancing government revenue after rate cuts on essentials.
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