The Goods and Services Tax (GST) system in India is undergoing a major overhaul effective from September 22, 2025, coinciding with the auspicious occasion of Navratri. This new GST structure marks one of the most significant changes in recent years, aiming to simplify tax regimes and reduce the burden on common consumers, especially on daily essential goods and services. The GST Council has streamlined the tax slabs, reducing the previous four-tier structure (5%, 12%, 18%, 28%) to just two main rates — 5% and 18%. This change is expected to make compliance easier and boost domestic consumption.

Key Highlights of the New GST Rates from September 22, 2025

• The revised GST rates come into force starting Navratri (September 22, 2025).

• The number of GST slabs has been reduced to two: 5% and 18%.

• Several essential food and consumer items have been moved to a lower tax bracket.

• Some items will attract a special higher rate of 40%, mainly sin goods like tobacco and luxury cars.

• Life and health insurance premiums are now exempt from GST.

• Many household and personal care products now attract a significantly lower GST.

New GST Rates List: Food and Beverages

The government has aimed to reduce the tax burden on food and beverages commonly used by households:

• Nil GST (0%): Indian breads such as chapati, paratha, and roti, ultra-high temperature (UHT) milk, and pre-packaged paneer are now exempt from GST, making staple foods more affordable.

• 5% GST: Items including butter, ghee, dry nuts, condensed milk, cheese, figs, dates, avocados, citrus fruits, sausages, meat, sugar-boiled confectionery, jams, fruit jellies, tender coconut water, namkeen, packaged drinking water (20 liters), fruit pulp and juices, milk-based beverages, ice cream, pastry, biscuits, cornflakes, cereals, and sugar confectionery items have all seen their GST rates slashed to 5% from higher slabs of 12% or 18%.

• Other popular consumables like plant-based milk drinks and soya milk drinks have also had their GST reduced to 5%, contributing to cheaper alternatives for consumers.

Household and Personal Care Goods

Tax cuts extend beyond food to everyday household items and personal care products:

• 5% GST: Tooth powder, feeding bottles, tableware, kitchenware, umbrellas, utensils, bicycles, bamboo furniture, combs, talcum powder, shampoo, toothpaste, toothbrushes, face powder, soap, and hair oil are now taxed at a reduced GST rate of 5%, down from 12% or 18%.

• Stationery items such as exercise books, maps, globes, pencils, erasers, crayons, and pastels have been moved to the 0% bracket to aid affordability for students and professionals.

• Footwear and textiles are also witnessing a cut, with GST reducing from 12% to 5% for most mass-market products, providing relief at the consumer level.

Electronics and Appliances

To encourage modern living and technology adoption:

• Consumer electronics like air conditioners, dishwashers, and television sets up to 32 inches will now attract 18% GST instead of the earlier 28%, a significant reduction intended to lower costs for households upgrading appliances.

• Small cars and motorcycles with engine capacity of 350 cc or less will see their GST reduced from 28% to 18% to encourage greener mobility options.

Health, Education, and Insurance

The government has emphasized social sectors with GST relief:

• Life-saving drugs, medical devices such as thermometers, glucometers, oxygen supplies, and diagnostic kits now attract either nil or 5% GST.

• Insurance premiums for life and health insurance policies have been fully exempted (0%), making insurance more affordable for the common man.

• Educational services like private tuition and coaching for classes up to 12th standard, along with vocational and skill development courses, have GST reduced to nil, encouraging greater access to education.

• Charitable hospital services and trusts engaged in health and education have also been moved to the nil rate.

Services and Hospitality Sector

GST cuts benefit services especially in tourism and wellness:

• Beauty and wellness services such as salons, spas, ayurvedic massage centers, gyms, yoga studios, and fitness centers have seen their GST reduced drastically from 18% to 5%.

• Hotels with tariffs below ₹1,000 per day now attract zero GST, while hotels with tariffs ₹1,001 to ₹7,500 see a reduction from 18% to 12%, and tariffs above ₹7,500 see a cut from 28% to 18%.

• Restaurants, particularly standalone non-AC ones with turnover up to ₹50 lakh per annum, have moved from 12% to 5%, offering considerable price relief at dining establishments.

Exceptions and Special Rates

• Certain sin goods like gutkha, tobacco, cigarettes, chewing tobacco products, and bidi will continue to attract the existing high rates along with compensation cess until related debt repayments are complete.

• A special 40% GST slab has been introduced for select luxury goods like high-end cars and tobacco products.

Impact on Common Man and Economy

This comprehensive GST restructuring is designed to:

• Simplify tax administration and reduce tax disputes by limiting the slabs to just two primary rates.

• Provide direct relief to consumers by lowering the tax burden on daily essentials.

• Encourage consumption and boost domestic demand amid economic challenges.

• Support government efforts in expanding tax compliance while maintaining revenues.

Summary of Key GST Rate Changes Effective September 22, 2025

Conclusion

The new GST rates effective from Navratri, September 22, 2025, bring substantial tax relief on many goods and services essential to daily life, education, healthcare, hospitality, and consumer items. These changes are designed to simplify the tax system while boosting affordability and stimulating economic growth. Consumers and businesses alike will benefit from clearer tax structures and lower prices on a wide range of products.

Stay informed about these GST updates and prepare for the new tax regime as it ushers in a more simplified and fair GST system benefitting every Indian household.