Introduction
New GST Rates in India Full List and Key Changes(Effective 22 September 2025): The Goods and Services Tax (GST) in India is undergoing a major overhaul. As of 22 September 2025, the GST Council’s recommendations have come into force, simplifying slabs, rationalizing rates, and adjusting many goods and services into new tax categories. This “GST 2.0” reform aims to reduce tax burden on essential goods, streamline compliance, and maintain higher taxation for luxury and sin goods.
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In this article, we present a full list (or a representative list) of items with their revised GST rates, highlight what gets cheaper or costlier, explain rules about input tax credit, timing, and offer tips for businesses and consumers to adapt.
Overview: What Has Changed
Simplification of Slabs: Before these changes, India had multiple GST slabs: 5%, 12%, 18%, 28%, and certain items with 0%. With the 2025 reform, the structure is now simplified. The 12% and 28% slabs have largely been done away with (or merged) under the new regime.
- Zero or nil GST for some essential and social goods
- 5% GST for many essential, daily-use, and lower-value goods
- 18% GST as the standard (or general) rate for many goods and services
- 40% GST (a new “super premium / sin / luxury” slab) for certain goods.
Zero GST Expansion: Many essential items, stationery, and life-saving drugs that were earlier taxed are now exempt (0%).
Downward Revisions: Goods and services that were earlier taxed at 12%, 18%, or 28% have in many cases been brought down to 5% or 18%, depending on classification.
Higher Rate for Luxury / Sin Goods: Items such as tobacco, cigarettes, pan masala, large cars, high-end goods, etc., now attract 40% GST (with cess or additional charges in some cases).
Transition / Input Credit Provisions:
- If a supply (goods or service) is made before 22 September, the old rate applies; for supplies made on or after 22 September, the new rate applies.
- Advances received before 22 September are taxed at the old rate; advances from 22 September onward are taxed at new rates.
- E-way bills issued before the date remain valid; no need to reissue.
- Input Tax Credit (ITC) already claimed prior to the change remains valid; but for supplies turning exempt now, reversal rules may apply.
Full / Representative List of Revised GST Rates
Note: This list is representative and not exhaustive. Refer to the official government notification or PDF for the complete schedule.
| Category / Item | Previous Rate(s) | New Rate | Notes / Comments |
|---|---|---|---|
| Stationery (exercise books, notebooks, pencils, erasers, crayons, maps, charts) | 5% / 12% | 0% | Now fully exempt. |
| Ultra High Temperature (UHT) milk | 5% | 0% | Becomes exempt. |
| 33 life-saving / critical drugs | 12% / 18% | 0% | Certain medicines will be tax-free. |
| Individual health & life insurance policies | 18% | 0% | Exempt from GST. |
| Private tuition, charitable hospitals, education services | 18% / 12% | 0% | Exempt categories. |
| Category / Item | Previous Rate(s) | New Rate | Notes / Comments |
|---|---|---|---|
| Daily-use food items (butter, ghee, cheese, spreads, namkeen) | 12%, 18% | 5% | Many food items shifted to 5%. |
| Dry fruits, nuts, raisins | 12%, 18% | 5% | Rate reduced. |
| Spices, starches, vegetable extracts | 12%, 18% | 5% | Lowered to 5%. |
| Toiletries, hair oil, shampoo, toothpaste, shaving cream | 18% | 5% | Personal care items now at 5%. |
| Utensils, sewing machines, small household goods | 12% | 5% | Rate cut to 5%. |
| Medical / diagnostic items (thermometers, test kits, glucometers) | 12% / 18% | 5% | Lowered to 5%. |
| Agriculture / farm machinery, drip irrigation, sprinklers | 12% / 18% | 5% | For agriculture equipment. |
| Textiles, handicrafts, footwear, toys | 12% / 18% | 5% | Many small goods shifted down. |
| Gyms, fitness centres, wellness services | 18% | 5% | Rate reduced. |
| Category / Item | Previous Rate(s) | New Rate | Notes / Comments |
|---|---|---|---|
| Electronic appliances (ACs, refrigerators, big TVs) | 28% | 18% | Many appliances get lower tax. |
| Small cars, two-wheelers (≤ 350 cc), three-wheelers | 28% | 18% | Vehicle tax rationalised. |
| Motor vehicles for goods transport | 28% | 18% | Lowered rate. |
| Cement | 28% | 18% | Construction material gets relief. |
| Coal, lignite, peat | 5% | 18% | Some reclassification. |
| Motorcycles > 350 cc | 28% | 40% | Premium bikes moved to higher slab. |
| Category / Item | Previous Rate(s) | New Rate | Notes / Comments |
|---|---|---|---|
| Tobacco products, cigarettes, pan masala | 28% + Cess | 40% | Now charged at 40%. |
| Carbonated / sugary drinks, soft drinks | 28% / 18% | 40% | Shifted to the highest slab. |
| Large / luxury cars, premium bikes, yachts, aircraft | 28% / high slabs | 40% | High-end vehicles taxed at 40%. |
| Packaged coconut water, soya milk drinks, beverages | 18% / 28% | 40% | Reclassified to 40%. |
What Becomes Cheaper / What Might Get Costlier
What Becomes Cheaper
- Most everyday food items, dairy products, snacks, nuts, spices, and cooking items will see significant tax reduction.
- Personal care goods (shampoo, soap, toothpaste, etc.) will cost less due to the 18% → 5% shift.
- Small vehicles (cars, two-wheelers) will become more affordable with the move from 28% to 18%.
- Construction costs may drop slightly (cement now at 18% instead of 28%).
- Diagnostic / medical devices and test kits will see lower tax burdens.
What May Become Costlier or Less Benefited
- Luxury goods, premium vehicles, high-end electronics may see less benefit or remain at higher taxation.
- Products newly placed into 40% slab (soft drinks, pan masala, etc.) will have steeper tax.
- Some goods previously at low slabs or exempt may lose advantage depending on classification changes.
Key Rules and Transition Aspects
- Time of Supply & Invoicing: If the supply is made before 22 September, the old rate applies, even if the invoice is issued later. If supply occurs on or after 22 September, the new rate applies.
- Advance Payments: Advances received before 22 September are taxed using the old rate; advances received on or after 22 September are taxed using the new rate.
- E Way Bills: E-way bills issued prior to 22 September remain valid until their period ends. There is no requirement to reissue for goods in transit.
- Input Tax Credit (ITC): ITC already availed before the date is not impacted by the rate change. If a supply becomes exempt under the new regime, related ITC may have to be reversed as per rules.
- Stock on Hand: Even if goods are purchased before 22 September, if sold after, they will attract new rates (i.e. GST is determined by the date of supply).
Impact and Benefits
- The government estimates that with the new “Next Generation” GST, about ₹2 lakh crore will be injected into the economy (through tax reductions and consumption growth).
- The reforms are expected to lower prices of essential goods, ease inflationary pressures, and put more money in the hands of consumers.
- Industries like automobile, appliances, construction, textiles are likely to benefit from lower input costs and increased demand.
- The simplification of slabs reduces complexity, dispute and compliance burden for businesses.
Tips for Businesses and Consumers
- Businesses: should update billing/invoicing software, point-of-sale systems, GST returns templates to reflect new slabs.
- Stock assessment: plan pricing and incentives knowing that goods sold after 22 September will attract new rates.
- Pass on benefits: companies should transparently pass on the tax reductions in pricing instead of retaining gains.
- Check classification carefully: small differences in classification (e.g. “soft drink” vs “mineral water”) can shift goods into different slabs.
- Read official notifications: Always refer to the Gazette / CBIC notification and the schedule (PDF) for complete and authoritative slab classification.
Importanant Links:
GST Simplified: Clearing Your Doubts Before the New Rates Kick In: Click Here
Conclusion:
The GST overhaul effective 22 September 2025 is one of the boldest reforms since the launch of GST in India. By consolidating slabs into mostly 5% and 18%, introducing a 40% luxury slab, and exempting many essentials, the government aims to ease tax burdens on common people while retaining revenues from premium goods.