GST Rate Changes in India (2025): Full List of What Gets Cheaper and What Becomes Costlier
The Goods and Services Tax (GST) Council of India has announced major GST rate revisions, effective 22 September 2025. These updates cover essential goods, FMCG items, automobiles, healthcare products, insurance, and luxury goods. The move aims to simplify the tax structure, reduce the burden on consumers, and boost consumption.
Here’s a sector-wise breakdown of what will become cheaper and what will get costlier under the new GST regime.
✅ Items Getting Cheaper Under GST 2025
1. Food & FMCG Products
- Nil GST (0%): Ultra-high temperature (UHT) milk, paneer, roti, chapati, paratha.
- Reduced GST (5% from 12%–18%): Namkeen, gujiya, sauces, instant noodles, coffee, ghee, butter, chocolates.
2. Household Appliances & Electronics
- 18% GST (from 28%): Air conditioners, televisions (all sizes), dishwashers.
3. Automobiles & Transport
- Small Cars & Motorcycles (<300cc): GST reduced from 28% to 12%.
- Three-wheelers: Reduced to 18% GST from 28%.
4. Healthcare & Medicines
- Nil GST (from 12%): Life-saving drugs and medicines.
- Nil GST (from 5%): Three critical cancer and chronic disease medicines.
5. Education & Stationery
- Nil GST on erasers, pencils, sharpeners, exercise books, graph books, laboratory note books, and other school notebooks.
6. Agriculture & Machinery
- 5% GST on tractors, harvesting gear, drip irrigation systems, composting machines, and agricultural equipment.
7. Other Consumer Items
- Cement: Reduced to 18% GST from 28%.
- Spectacles & Goggles: Now 5% GST (earlier 28%).
- Manmade fibre & yarn: 5% GST (earlier 12%–18%).
8. GST Exemptions
- Individual life insurance policies.
- Individual and family health insurance policies (including senior citizen plans).
❌ Items Getting Costlier Under GST 2025
1. Sin Goods & Beverages
- 40% Special GST Slab on:
- Pan masala, gutkha, cigarettes, chewing tobacco.
- Aerated water with added sugar, carbonated and caffeinated beverages.
- GST will now be charged on Retail Sale Price (RSP) instead of transaction value for stricter revenue tracking.
2. Luxury Goods
- Higher GST Rates on:
- Mid-size & large cars.
- Aircrafts & helicopters (personal use).
- Yachts and other luxury vessels.
📅 Implementation Timeline
- Effective Date: 22 September 2025 (most goods and services).
- Exception: Pan masala, gutkha, cigarettes, and other compensation-cess-linked items remain under existing rates until cess obligations are cleared.
📝 New GST Rate Summary (Sector-Wise)
| Sector / Items | New GST Rate |
|---|---|
| UHT milk, paneer, roti/chapati/paratha | 0% (Nil) |
| Life-saving drugs & insurance | 0% (Nil) |
| FMCG essentials, packaged food | 5% |
| Agricultural machinery & equipment | 5% |
| Handicrafts, eyewear | 5% |
| Electronics, small vehicles, cement | 18% |
| Sin goods (tobacco, sugar drinks) | 40% (special de-merit rate) |
🔎 Key Takeaways
- GST slabs reduced from four to two (5% & 18%), with a special 40% sin slab.
- Common consumer items, education, agriculture, and healthcare benefit from lower GST.
- Luxury and sin goods attract higher taxation.
- Simplified GST structure is expected to boost consumption and reduce compliance burden.
👉 Stay tuned on A2Z Legal Hub for the latest GST updates, tax law changes, and compliance news.