New GST Rates Kick In: What Gets Cheaper From Today

India has implemented its biggest Goods and Services Tax (GST) revamp since its launch in 2017, effective September 22, 2025. The reform reduces four tax slabs to two — 5% and 18%, aiming to streamline the system, boost consumption, and provide significant relief to households and industries.

Prime Minister Narendra Modi described the overhaul, along with earlier income tax cuts, as a “savings festival” (Bachat Utsav), estimating that Indians would collectively save ₹2.5 lakh crore.

GST Benefits for Households and the Middle Class

The government has pitched the reforms as a dual benefit:

  • Income tax cuts primarily helped the middle class.

  • GST reductions extend to the poor and the neo-middle class.

PM Modi noted, “With these reforms, people will be able to save more and spend on what they wish. From youth, farmers and women to shopkeepers, traders and entrepreneurs—everyone will gain from this Bachat Utsav.”

Appliances and Electronics: Big Price Drops

  • Air Conditioners: Split ACs now cost ₹2,800–₹5,900 less; window ACs are down by around ₹3,400.

  • Dishwashers: Up to ₹8,000 cheaper, entry-level models dropping around ₹4,000.

  • Televisions: Models above 32 inches see reductions between ₹2,500 and ₹85,800 depending on size and quality.

Daily Essentials and Personal Care

  • Bathroom essentials: Hair oil, soaps, shampoos, toothpaste, toothbrushes now under 5% GST.

  • Grooming products: Talcum powder, shaving cream, after-shave lotions cut from 18% to 5%.

  • Baby products: Diapers and feeding essentials become cheaper, providing relief to young families.

Food and Kitchen Staples

  • Dairy products:

    • Ghee prices fall by ₹40–70 per litre.

    • Butter drops by ₹4 per 100g pack.

    • Paneer becomes ₹4 cheaper per 200g pack.

  • Packaged foods: Instant noodles cheaper by ₹4, chocolates by up to ₹100, sauces and jams down as they move to 5% GST.

  • Beverages: Fruit juices fall by ₹5–10 per pack, coffee by ₹30–95, bottled water by ₹2. Aerated drinks remain high-taxed.

  • Tax-free items: UHT milk, pre-packaged paneer, and all Indian breads (roti, chapati, parantha) are now fully exempt.

Healthcare and Wellness Relief

  • Medicines: 33 lifesaving drugs are tax-free; most other medicines cut from 12% to 5%.

  • Medical devices: Glucometers, surgical equipment, diagnostic kits all see price reductions.

  • Wellness services: Gym memberships, salons, barbers, yoga, and spa sessions drop from 18% to 5%.

Automobiles and Transport: Big Winners

  • Two-wheelers: Scooters and motorcycles under 350cc down by ₹5,600–18,800.

  • Entry-level cars: Budget hatchbacks cheaper by ₹40,000–75,000; sedans by ₹57,000–80,000.

  • SUVs: Mainstream SUVs reduced by ₹1.01–1.56 lakh; luxury SUVs by ₹1.8–4.48 lakh. Ultra-premium cars see price cuts exceeding ₹30 lakh.

  • Commercial vehicles: Buses, trucks, and ambulances become cheaper, reducing logistics costs.

  • Auto parts: All components now taxed at a uniform 18%, simplifying the supply chain.

Construction and Agriculture

  • Cement: Tax cut from 28% to 18%, lowering construction costs.

  • Farm equipment: Tractors, harvesters, soil prep tools become cheaper.

  • Fertiliser inputs: Lower rates on raw materials could ease farmers’ input costs.

Hospitality and Student Relief

  • Hotels: Rooms priced up to ₹7,500/night see GST cut from 12% to 5%.

  • Education supplies: Exercise books, pencils, crayons, erasers, sharpeners are tax-free. Geometry boxes and school cartons shift from 12% to 5%.

Insurance Gets Full Exemption

  • Life Insurance: Term, ULIP, and endowment plans are now tax-free.

  • Health Insurance: Family floaters and senior citizen plans exempt from GST.

This is expected to expand financial inclusion and provide direct relief to policyholders.

Push for “Swadeshi” and Self-Reliance

PM Modi also highlighted the importance of Indian-made goods, drawing parallels between the role of Swadeshi in India’s independence and its potential for prosperity today.

He stressed: “The country will make progress only when Indians buy Indian-made goods with pride. Too many foreign items have entered our daily lives without us knowing. We need to get rid of them.”

Structural Impact of GST Revamp

  • Simplified tax structure: Moving from four slabs to two (5% and 18%).

  • Consumption boost: Lower costs during festive season expected to drive FMCG, auto, retail, and e-commerce growth.

  • Industrial push: Cheaper cement, transport vehicles, and machinery to aid infrastructure and agriculture.

  • Financial security: Tax-free insurance ensures wider adoption of protection schemes.

Conclusion: India’s Largest Tax Relief in a Decade

The GST revamp of 2025 is India’s biggest consumption tax reform since 2017. By making essentials, vehicles, medicines, and even insurance cheaper, the government aims to boost consumption, support industries, and stimulate economic growth.

As festive demand peaks, the impact will be closely watched across markets. If successful, this reform could mark a new phase of India’s growth story, driven by affordability, inclusion, and domestic strength.


Location: Pune, Maharashtra, India

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