The revised Goods and Services Tax (GST) rates announced by the GST Council earlier this month took effect across India on Monday. The new structure reduces the number of tax slabs from four to two, 5 percent and 18 percent, along with a special 40 percent rate on luxury and “sin” goods.
Prime Minister Narendra Modi described the changes as a major relief measure. “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,” he said in an address on Sunday evening. Modi added that combined with earlier income tax cuts, the changes would help people save nearly ₹2.5 lakh crore.
Finance Minister Nirmala Sitharaman called the move a “Diwali gift” for the middle class. “In common man and middle-class items, there is a complete reduction. This reform is not just about rationalising rates. It’s also about ease of living so that businesses can conduct their operations with greater ease,” she said.
What gets cheaper and costlier
The table below shows key categories affected by the new GST rates, along with examples and their impact on prices:
| Category | Examples | New GST Rate | Impact |
|---|---|---|---|
| Daily essentials & food | Soaps, shampoos, toothpaste, diapers, ghee, paneer, biscuits, chocolates, fruit juice | 5% | Cheaper by ₹2-70 depending on product |
| Electronics & appliances | Air conditioners, dishwashers, TVs, washing machines | 18% | Cheaper by ₹2,500-85,000 depending on size/model |
| Automobiles | Hatchbacks, sedans, SUVs, scooters, motorcycles below 350cc | 18% | Cheaper by ₹5,600-4.5 lakh across segments |
| Health & medicines | 33 life-saving drugs, cancer medicines, glucometers, diagnostic kits | Nil or 5% | Major savings on essential drugs and devices |
| Construction | Cement, agricultural machinery, fertiliser inputs | 18% | Reduced housing and farming costs |
| Services | Salon visits, barber shops, gyms, yoga, hotels under ₹7,500 | 5% | Lower bills for common services |
| Costlier items | Cigarettes, gutka, carbonated drinks, luxury SUVs, motorcycles above 350cc, yachts, online gaming | 40% | Significantly more expensive |
Items that will attract 18% GST – full list
| Item Description | GST Rate |
| Bidis | 18% |
| Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements | 18% |
| Coal; briquettes, ovoids and similar solid fuels manufactured from coal | 18% |
| Lignite, whether or not agglomerated, excluding jet | 18% |
| Peat (including peat litter), whether or not agglomerated | 18% |
| Goods made from other than natural menthol: Menthol and menthol crystals, Peppermint oil, and similar | 18% |
| Odoriferous preparations which operate by burning (excluding agarbattis, lobhan, dhop batti, etc.) | 18% |
| Biodiesel (except when supplied to Oil Marketing Companies for blending with diesel) | 18% |
| New pneumatic tyres of rubber (excluding bicycle, cycle rickshaw, rear tractor, aircraft tyres) | 18% |
| Chemical wood pulp, dissolving grades | 18% |
| Uncoated paper and paperboard for writing, printing, other graphic purposes (except some exclusions) | 18% |
| Uncoated kraft paper and paperboard (excluding some types) | 18% |
| Other uncoated paper and paperboard with minimal processing | 18% |
| Greaseproof papers; Glassine papers | 18% |
| Composite paper and paperboard (flat layers stuck together with adhesive) | 18% |
| Paper/paperboard coated with kaolin or other inorganic substances | 18% |
| Paper and paperboard corrugated, creped, embossed, perforated (excluding some types) | 18% |
| Articles of apparel and clothing accessories exceeding Rs 2500 per piece (knitted/crocheted) | 18% |
| Articles of apparel and clothing accessories exceeding Rs 2500 per piece (not knitted/crocheted) | 18% |
| Made-up textile articles exceeding Rs 2500 per piece (excluding worn clothing, rags) | 18% |
| Spark-ignition reciprocating or rotary internal combustion piston engines (non-aircraft) | 18% |
| Compression-ignition internal combustion piston engines (diesel or semi-diesel) | 18% |
| Parts for use with engines of heading 8407 or 8408 | 18% |
| Fuel/lubricant dispensing pumps used in filling stations or garages | 18% |
| Air-conditioning machines with motor-driven fan and humidity control | 18% |
| Household dish washing machines and others | 18% |
New GST Rate on Dry Fruits, Spices
The GST Council has slashed rates on dry fruits, spices, and related items, bringing them into the 5 percent slab. Consumers will see lower prices on everyday products like nuts, dried fruits, malt, and sausages.
| Item | Revised GST Rate | Previous Rate |
| Dried nuts | 5% | 12%–18% |
| Dried fruits | 5% | 12%–18% |
| Malt | 5% | 12%–18% |
| Starches | 5% | 12%–18% |
| Vegetable extracts | 5% | 12%–18% |
| Sausages | 5% | 12%–18% |
| Sugar products | 5% | 12%–18% |
New GST Rate on Beverages
Beverages with added sugar and flavoring have moved to the highest GST slab of 40 percent. Packaged coconut water, soya milk drinks, carbonated fruit drinks, and other sugary beverages will now cost more.
| Item | Revised GST Rate | Previous Rate |
| Packaged coconut water | 40% | 18%–28% |
| Soya milk drinks | 40% | 18%–28% |
| Other non-alcoholic sugary beverages | 40% | 18%–28% |
| Caffeinated beverages | 40% | 28% |
| Carbonated fruit drinks | 40% | 28% |
New GST Rate on Sin Goods
The government has raised taxes sharply on sin goods, placing most of them in the 40 percent GST bracket. Pan masala, tobacco, cigars, and cigarettes will see higher prices, while bidis shift to 18 percent.
| Item | Revised GST Rate | Previous Rate |
| Pan masala | 40% | 28% + Cess |
| Tobacco products | 40% | 28% + Cess |
| Cigars | 40% | 28% + Cess |
| Cigarettes | 40% | 28% + Cess |
| Bidis | 18% | 28% + Cess |
New GST Rate on Industrial Goods
Key industrial items have seen notable changes under the new GST regime. Cement now falls under the 18 percent slab, while coal, lignite, and peat have moved up from 5 percent to 18 percent.
| Item | Revised GST Rate | Previous Rate |
| Cement (Portland, slag, etc.) | 18% | 28% + Cess |
| Coal, lignite, peat | 18% | 5% |
New GST Rate on Healthcare & Medical Supplies
Healthcare has received a boost with GST reductions on essential items. Medical oxygen, diagnostic kits, life-saving drugs, reagents, and surgical supplies are now taxed at 5 percent, down from 12 percent.
| Item | Revised GST Rate | Previous Rate |
| Medical-grade oxygen | 5% | 12% |
| Diagnostic kits | 5% | 12% |
| Essential drugs | 5% | 12% |
| Reagents | 5% | 12% |
| Surgical supplies | 5% | 12% |
New GST Rate on Lifestyle & Household Items
| Item | Revised GST Rate | Previous Rate |
| Personal care items | 5% | 12%–18% |
| Toiletries | 5% | 12%–18% |
| Furniture | 5% | 12%–18% |
| Handicrafts | 5% | 12%–18% |
| Utensils | 5% | 12%–18% |
| Toys | 5% | 12%–18% |
| Musical instruments | 5% | 12%–18% |
New GST Rate on Automobiles & Luxury Vehicles
Vehicle buyers are among the biggest beneficiaries of GST 2.0. Small cars, scooters, and motorcycles up to 350cc now attract 18 percent GST, while bigger motorcycles, luxury cars, yachts, and aircraft face a 40 percent rate.
| Item | Revised GST Rate | Previous Rate |
| Motorcycles up to 350cc | 18% | 28% |
| Scooters | 18% | 28% |
| Small cars | 18% | 28% |
| Bicycles | 18% | 28% |
| Motorcycles above 350cc | 40% | 28% + Cess |
| Luxury cars | 40% | 28% + Cess |
| Aircraft | 40% | 28% + Cess |
| Yachts | 40% | 28% + Cess |
| Pistols | 40% | 28% + Cess |
New GST Rate on Entertainment & Services
| Item | Revised GST Rate | Previous Rate |
| Cinema tickets (≤ ₹100) | 5% | 12% |
| Cinema tickets (> ₹100) | 40% | 18%–28% |
| Insurance premiums (life, health, general) | 0% | 18% |
| Private tuition | 0% | 18% |
| Vocational courses | 0% | 18% |
| Charitable hospital services | 0% | 12% |
| Charitable education services | 0% | 12% |
| Hotels (₹1,001–₹7,500 per night) | 5% | 12% |
| Beauty & wellness (salons, gyms, spas) | 5% | 18% |
Companies have already announced price cuts to pass on the benefit. Hindustan Unilever has reduced prices on soaps and shampoos, with a four-pack of Lifebuoy now retailing at ₹60 instead of ₹68. Amul has cut the price of one-litre ghee packs to ₹610 from ₹650.
In the automobile sector, Maruti Suzuki, Tata Motors and Hyundai have issued new price lists. The Maruti Alto K10 now starts at ₹3.69 lakh, while the Tata Altroz has dropped by up to ₹1.1 lakh.
In health care, 33 life-saving drugs including treatments for cancer and rare diseases have been made tax-free. Medical devices such as glucometers are now taxed at 5 percent instead of 12 percent.
Union Home Minister Amit Shah said the measures will help households across the country. “Zero GST on life and health insurance, along with cuts on daily essentials like soaps and toothpaste, will help people save more,” he said.
The Finance Ministry has directed manufacturers to update maximum retail prices on unsold stock by December 31, ensuring consumers see the benefit directly.
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