Centre rolls out new GST regime: Only 5 pc and 18 pc slabs from Sep 22
Almost all personal-use items will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs
From hair oil, milk products, and corn flakes to TVs, and personal health and life insurance policies, GST tax rates on common-use items were slashed after the all-powerful GST Council on Wednesday (September 3) approved a complete overhaul of the tangled Goods and Services Tax (GST) regime.
The GST Council approved a rate overhaul by limiting slabs to 5 per cent and 18 per cent, effective from September 22, the first day of Navaratri.
Almost all personal-use items will see rate cuts as the government looks to boost domestic spending and cushion the economic blow of the US tariffs.
Also Read: Centre rolls out new GST regime: Only 5 pc and 18 pc slabs from Sep 22
Only two slabs now
Briefing reporters after a marathon daylong GST Council meeting, Union Finance Minister Nirmala Sitharaman said all decisions were taken unanimously, with no disagreement with any state.
The panel approved simplifying the goods and services tax (GST) from the current four slabs – 5, 12, 18 and 28 per cent – to a two-rate structure -- 5 and 18 per cent. A special 40 per cent slab is also proposed for a select few items such as high-end cars, tobacco and cigarettes.
The new rates for all products, except gutkha, tobacco and tobacco products and cigarettes, will be effective September 22 -- the first day of Navratri, she said.
Also Read: Diwali comes early: Council slashes GST on everyday items; here is the full list
What will get cheaper?
While daily use food items will continue to attract nil tax rate, common use food and beverages ranging from butter and ghee to dry nuts, condensed milk, sausages and meat, sugar boiled confectionery, jam and fruit jellies, tender coconut water, namkeen, drinking water packed in 20-litre bottles, fruit pulp or fruit juice, beverages containing milk, ice cream, pastry and biscuits, corn flakes and cereals, and sugar confectionery are likely to see a cut in tax rate to 5 per cent from the current 18 per cent.
All forms of chapati and paratha will be charged nil tax, down from the current rate of 5 per cent.
Consumer goods such as tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture and combs will see rate cut from 12 per cent to 5 per cent. The rates on shampoo, talcum powder, toothpaste, toothbrushes, face powder, soap and hair oil has been cut down to 5 per cent from 18 per cent.
Sitharaman said all individual life and health insurance policies will now attract nil tax in a bid to boost coverage.
Cement will cost less with the tax rate coming down from 28 per cent to 18 per cent. Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length, too, would move to 18 per cent rate from 28 per cent.
Also Read: Mega GST reforms fuel stock markets rally; Sensex jumps nearly 900 points
Reforms in auto sector
All cars larger than 1,200 cc for petrol and 1,500 cc for diesel will be charged at 40 pc, the finance minister said.
Motorcycles up to 350 cc, consumer electronics like air-conditioners, dishwashers, and TVs, too, will be taxed at lower GST of 18 per cent as against 28 per cent currently.
All automobiles above 1,200 cc and longer than 4,000 mm as well as motorcycles above 350 cc, yachts and aircrafts for personal use, and racing cars will be attract a 40 per cent levy.
EVs will continue to be charged at 5 per cent GST.
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Live Updates
- 4 Sept 2025 2:47 PM IST
40 pc GST: Full list of ‘sin goods’, luxury items and IPL match tickets
GST Council has introduced a special 40 per cent slab, the highest in the Goods and Services Tax (GST) regime, for a select few items, including IPL match tickets. See the full list of items under 40 per cent GST here
- 4 Sept 2025 2:27 PM IST
GST reforms reflect Mamata’s demand for zero tax on life, health insurance: West Bengal Minister
On GST reforms, West Bengal Minister Chandrima Bhattacharya said, "We supported the rate rationalisation proposal on two things. We want there to be no burden of tax on common people. So, our CM had said much before that there should be 0% tax on individual life insurance and health insurance...I said this in GoM as per her instructions. We raised this at the GST Council as well. We are happy that the Centre agrees with what our CM said..."
- 4 Sept 2025 2:22 PM IST
GST reforms have provided a big relief for the poor and middle class: Pralhad Joshi
On GST reforms, Union Minister Pralhad Joshi said, "I thank Prime Minister Modi for such a major reform. A big relief has been provided for the poor and middle class. The work of simplifying GST has been done. GST on food items has been reduced to 0% or 5% only. This is a very important decision... Opposing is just the opposition's job. Their thinking is beyond my understanding..."
- 4 Sept 2025 2:20 PM IST
GST reforms will accelerate the pace of the economy: Union Minister Dharmendra Pradhan
On GST reforms, Union Minister Dharmendra Pradhan said, "I thank the Prime Minister that under his guidance, the GST Council has unanimously implemented new GST reforms. I express gratitude on behalf of India's industry, its middle class, and the education sector, in particular. GST has been removed from many items, and GST on many items has been reduced to 5%. The expenditure of citizens on education will increase. The pace of the economy will accelerate..."
- 4 Sept 2025 2:19 PM IST
GST reforms will bring a huge boost to the economy: Union Minister Sukanta Majumdar
On GST reforms, Union Minister Sukanta Majumdar says, "This will be very helpful for the middle class in the coming times. When there will be savings, they will be able to invest in other places, so in the coming times, this will bring a huge boost to the economy. I thank the Prime Minister... The opposition is suffering from the disease of discontent; there is no cure for them. They are in opposition and they will remain dissatisfied for years..."
- 4 Sept 2025 2:17 PM IST
GST reform is a step towards 'One Nation One Tax': Dodhia Group
On GST reforms, Bhadresh Dodhia, Director - International Sales and Finance, Dodhia Group, says, "This is a positive move by Govt. It was long-awaited and long overdue. Certainly, we have seen that the adoption of GST was one major milestone in economy of India. Today is another milestone where we are moving towards an almost One Nation One Tax. This is one small step forward, we still have a long way to go. Certainly this move, this intention of Govt will help consumer spend more and move the economy forward..."
- 4 Sept 2025 2:15 PM IST
GST reform is huge change and a 'bundle of happiness': Sambit Patra
On GST reforms, BJP MP Sambit Patra says, "...This is not just a reform, this is a huge change and a bundle of happiness...Modi hai toh mumkin hai!...Those who thought this was impossible, it is time for them to think..."
- 4 Sept 2025 2:13 PM IST
Why new GST rates are a shot in the arm for auto industry
India’s automotive industry got a major boost after the Goods and Services Tax (GST) Council on Wednesday (September 3) announced a complete overhaul of the tax regime.
The decision, according to experts, would give the auto sector, an important part of capital goods sector, a strategic boost, especially ahead of the festive season through to Diwali.
The GST reform has brought an air of satisfaction in the country’s auto industry, which has otherwise dealt with a slowdown.A special 40 per cent slab was proposed for a select few items, such as high-end cars.
- 4 Sept 2025 2:09 PM IST
Carbonated soft drinks to become costlier with GST rate hiked to 40 pc
Popular soft drinks, such as Coca-Cola and Pepsi, along with other non-alcoholic beverages, will become costlier now, after the GST Council on Wednesday (September 3) approved a hike in tax rate on carbonated beverages to 40 per cent from 28 per cent at present.
As part of the reforms of the Goods and Services Tax (GST), the council increased the rate on carbonated beverages of fruit drink or carbonated beverages with fruit juice to 40 per cent from 28 per cent.
The council also hiked the GST rate on caffeinated beverages to 40 per cent from 28 per cent.
- 4 Sept 2025 2:08 PM IST
Small cars, bikes up to 350 cc to get cheaper as GST reforms kick in
As part of the complete overhaul of the tangled Goods and Services (GST) regime, small cars and entry-level bikes are now all set to get cheaper.
Petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length would move to the 18 per cent rate from the current 28 per cent.
Motorcycles up to 350 cc would be taxed at a lower GST of 18 per cent against 28 per cent currently.
