The GST Council of India has introduced significant changes to the tax structure, effective from September 22, 2025, aimed at simplifying the system, reducing prices of essential goods, and maintaining higher taxes on luxury and harmful products. The revised GST slabs will be 0%, 5%, 18%, and 40%, replacing the previous 12% and 28% rates for many items. This reform seeks to make daily necessities and clean energy products more affordable while keeping luxury and unhealthy goods expensive.GST 2.0 Blueprint Released: Simplified Tax Structure with 5% and 18% Slabs, What's there in New Plan Proposal?
Daily Essentials:
Ultra High Temperature (UHT) milk and Indian breads (e.g., pav, bun) are now fully exempt from GST (previously 5%). Condensed milk, butter, ghee, and cheese reduced from 12% to 5%. Hair oil, toothpaste, toilet soap, toothbrush, and shaving cream lowered from 18% to 5%. Almonds, cashews, pistachios, hazelnuts, and dates reduced from 12% to 5%. Utensils, feeding bottles, baby napkins, clinical diapers, sewing machines, and their parts reduced from 12% to 5%. Processed sugar, syrups, confectionery products, vegetable oils, animal fats, meat and fish products, malt-based foods, namkeen, bhujia, ready-to-eat snacks, and packaged water (without sugar or flavor) now taxed at 5%.
Agriculture and Fertilizers:
Fertilizers reduced from 12–18% to 5%. Tractor tires, parts, and tractors lowered from 18% or 12% to 5%. Specific bio-pesticides, micronutrients, drip irrigation systems, sprinklers, and machinery for agriculture, horticulture, or forestry reduced from 12% to 5%.
Healthcare and Education:
Thermometers reduced from 18% to 5%. Personal health and life insurance now zero-rated (previously 18%). Medical oxygen, diagnostic kits, glucometers, test strips, and spectacles reduced from 12% to 5%. Maps, charts, globes, pencils, sharpeners, crayons, pastels, exercise books, notebooks, and erasers are now GST-exempt (previously 12%).Supreme Court Formulates Nine-Point Guidelines to Streamline GST Investigations and Prevent Parallel Probes..!
Electronics and Appliances:
Air conditioners, televisions (above 32 inches), LED/LCD TVs, monitors, projectors, and dishwashing machines reduced from 28% to 18%.
Automobiles:
Petrol and petrol-hybrid cars, LPG, and CNG cars (up to 1200 cc and 400 mm) reduced from 28% to 18%.
Other Sectors:
Renewable energy devices, construction materials, sports goods, toys, leather products, wooden items, and handicrafts reduced from 12% to 5%.
Unhealthy Goods (Sin Goods):
Pan masala, gutka, cigarettes, chewing tobacco, zarda, raw tobacco, and bidis will continue to attract high GST rates with additional cess until government loans are repaid.Taxation for these items will now be based on Retail Sale Price (RSP) instead of transaction value, tightening compliance.
Sweetened or flavored beverages, including aerated water, will face a higher GST rate of 40% (previously 28%).Modi Government’s GST Reforms: A Diwali Gift of Tax Relief for the People..!
The reduction in GST rates for daily essentials, agricultural inputs, healthcare, and education-related items is expected to lower costs for consumers. However, higher taxes on unhealthy goods aim to promote healthier choices while generating revenue to address fiscal obligations.