New GST Rates 2025: Full List of Items - What Gets Cheaper, What’s Costlier

New GST Rates 2025: In a major tax overhaul, the Goods and Services Tax (GST) Council has slashed rates on a wide range of household essentials, medicines, appliances, and vehicles, while hiking duties on luxury goods, tobacco, and aerated drinks. The new GST rates will be effective starting September 22, 2025, according to the official notification.

The council has reduced the existing four-rate structure, 5%, 12%, 18%, and 28% to a simplified two-slab system of 5% and 18%. However, a special 40% slab will apply to select items such as high-end cars, soft drinks, tobacco, and luxury services.

New GST Rates: What Gets Cheaper?

Food and Beverages

• All forms of chapati and paranthas will now attract nil GST, down from 5%.
• Items like paneer, pizza bread, khakra, and UHT milk will also become tax-free.
• Butter, ghee, dry fruits, condensed milk, sausages, jam, fruit jellies, namkeen, biscuits, confectionery, corn flakes, and packaged drinking water (20-litre bottles) will see GST reduced to 5% from 18%.
• Plant-based milk and soya drinks will now be taxed at 5%, down from 18% and 12%, respectively.

Household Items

• Toothpowder, feeding bottles, bicycles, bamboo furniture, kitchenware, and umbrellas will move to 5% from 12%.
• Shampoo, toothpaste, soap, talcum powder, and hair oil will be taxed at 5%, down from 18%.

Appliances and Stationery

• TVs, dishwashers, and air-conditioners will fall under the 18% slab instead of 28%.
• Notebooks, exercise books, crayons, maps, charts, and pencils will now be tax-free, while erasers will also move to nil GST from 5%.

Healthcare and Insurance

• Life-saving drugs and medical devices like thermometers, diagnostic kits, and corrective spectacles will be taxed at 5% or nil, down from 12–18%.
• Individual life and health insurance policies will now attract nil GST.
• Third-party insurance for goods carriage will be taxed at 5% with ITC, down from 12%.

Travel and Hospitality

• Hotel tariffs up to ₹7,500 will be taxed at 5% without ITC, compared to 12%.
• Economy flight tickets will also attract just 5% GST.

Vehicles and Auto Components

• Motorcycles up to 350cc will move to 18% from 28%.
• Small hybrid cars and electric vehicles will benefit from lower GST, while auto components will now be taxed at 18% instead of 28%.
• Petrol, LPG, and CNG cars under 1,200cc, as well as small diesel cars, will also see a reduction to 18% from 28%.

Construction and Agriculture

• Cement will be taxed at 18% instead of 28%.
• Sewing machines, hand pumps, nozzles, threshers, tractors, and various agricultural machinery will move to 5% from 12%.
• Key fertiliser inputs like sulphuric acid, nitric acid, and ammonia will also be taxed at 5% instead of 18%.

Beauty and Wellness Services

• Services like salons, gyms, yoga centres, and fitness clubs will be taxed at 5% without ITC, down from 18%.

Don't Miss: Is TikTok Returning to India? ByteDance Begins Hiring in Gurgaon; Roles And Details Inside

New GST Rates: What Gets Costlier?

Beverages

• Aerated drinks such as Coca-Cola and Pepsi will now attract 40% GST, up from 28%.
• Caffeinated and other non-alcoholic beverages will also be taxed at 40%, higher than the previous 18–28% slab.

Vehicles and Luxury Goods

• Cars above 1,200cc, SUVs, motorcycles above 350cc, racing cars, yachts, and personal aircraft will fall under the 40% slab.

Tobacco and Cigarettes

• Tobacco products will continue at 28% GST plus cess, but once the compensation cess ends, they will be taxed at 40% GST.

Gambling and Leisure Activities

• Casinos, horse racing, online gaming, and IPL tickets will now be taxed at 40% GST.
• Race club services and gambling-related rentals will also fall in this slab.

New GST Rates: Industry Leaders React

The reforms have drawn strong responses across sectors, with leaders welcoming the move as a step toward affordability and inclusion.

Ridhima Kansal, Director, Rosemoore, “This GST reform is a game-changer for women and youth, lowering compliance costs and making housing, medicines, and inputs more affordable. It paves the way for innovation, entrepreneurship, and stronger families. The government’s message is clear: every rupee saved on taxes creates opportunity and strengthens India’s future.”

Gunjan Goel, Director, Goel Ganga Developments, “The cuts on GST for cement and medicines mean unprecedented opportunities for young entrepreneurs and women-led ventures. Affordable real estate and reduced medicine costs ease household burdens. With less bureaucracy, creativity and resilience thrive, making the rise of new startups and businesses a testament to ambition, not privilege.”

Jeevan Kasara, Director & CEO, Steris Healthcare Pvt. Ltd., “The sharp drop in GST on medicines, from as high as 12-18% to 5% or zero on life-saving drugs, brings us closer to affordable healthcare. FM Sitharaman’s reforms break down barriers, making essential therapies, cancer drugs, and health devices available to the public. This is a victory for patients and families fighting treatment costs, fostering better health outcomes and wider coverage.”

The government said the restructuring aims to boost consumer demand, reduce inflationary pressure, and simplify tax compliance. At the same time, luxury and sin goods face higher levies to maintain revenue neutrality.

The changes mark the biggest overhaul of India’s indirect tax system since GST was rolled out in 2017.

Don't Miss: National Lok Adalat 2025: Settle Traffic Challans, Matrimonial Disputes And Labour Issues on September 13, 2025

Keep reading Herzindagi for more such stories.

Image Courtesy: Freepik