GST Reforms approved: What gets cheaper and costlier from September 22 - FULL LIST here

Union Finance Minister Nirmala Sitharaman on Wednesday (Sep 3) addressed the media and announced that the GST Council, in its meeting, approved a two-tier structure of 5 per cent and 18 per cent, and a special tax of 40 per cent for luxury and sin goods. Sitharaman said the decision was taken unanimously and will come into effect from September 22, 2025, with the exception of tobacco products, based on certain conditions. The Council will also meet on Thursday (Sep 4). Calling it a ‘historic Diwali gift for the nation’, Sitharaman said that these next-generation GST reforms are for ease of living and to build an Aatmanirbhar Bharat.

After the announcements, Prime Minister Narendra Modi said that the government's intention was to bring the next-generation reforms in GST to “ensure ease of doing business for all, especially small traders and businesses.” “The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy,” the PM said. He praised the GST council comprising the Union and States for collectively agreeing to the proposals submitted by the Union Government on GST rate cuts and reforms. He said it will benefit the common man, farmers, MSMEs, the middle class, women, and youth. "The wide-ranging reforms will improve the lives of our citizens,” he added.

What gets cheaper?

Stating that a complete reduction has been done on items that the common man and middle class use on a daily basis, Union Finance Minister Nirmala Sitharaman said that items like milk, paneer, chena, and all Indian breads (roti, paratha) will come under nil tax. She added that items like namkeen, noodles, chocolates, coffee, butter, ghee were brought from 12/18 per cent, 5 per cent. The finance minister also added that ACs, TVs (all sizes), dishwashers, small cars, and motorcycles ≤350cc were moved from 28 per cent to 18 per cent.

Zero tax

1. Paneer/Chena (packed)
2. UHT Milk (tetra-pack milk)
3. Paratha/Parota & Indian breads (all names)
4. Roti/Chapati/Khakhra, Pizza bread

Moved to 5%

• Butter / Ghee / Dairy spreads
• Cheese
• Dry Fruits (almonds, pistachio, hazelnut, dates, anjeer etc.)
• Chocolates, Pastry, Cakes, Biscuits, Jams
• Namkeen/Bhujia/Mixture/Chabena (packed)
• Pasta/Spaghe[/Macaroni/Noodles
• Corn Flakes & other cereal flakes
• Pickles (achar)
• Fruit & Veg Juices Tender Coconut Water (packed)
• Refined Sugar & Sugar Cubes
• Coffee
• Curry paste
• Mayonnaise
• Salad dressings
• Soups & Broths (ready/pre-mix)
• Yeast & Baking powder
• Preserved Fish/Meat (canned/ready)
• Beverages (non-alcoholic)
• Drinking Water jars
• Plant-based milk drinks (coconut milk, almond milk, cashew milk, flax milk, rice milk, and oat milk)
• Fruit-pulp/fruit-juice based drinks (non-carbonated)
• Beverages containing milk (milk-based drinks)
• Personal Care (daily-use)
• Toilet Soaps (bars/cakes)
• Toothpaste
• Dental floss
• Toothbrushes
• Tooth powder
• Hair oil & Shampoo
• Talcum/Face powder
• Shaving cream/afershave/loGon
• Combs, hairpins, curlers (non-electric)
• Feeding bottles & nipples
• Baby napkins & diapers (all types)
• Safety matches
• Candles/handmade candles
• Kitchen utensils (Steel/Aluminium/Copper/Brass/Wood)
• Kerosene/wood stoves (non-electric)
• Sewing machines & parts
• Rubber bands
• Students & Education
• Exercise/Graph/Lab notebooks
• Erasers
• Textbook/Notebook paper (uncoated)
• Maps/Atlases/Globes (printed)
• Pencils, crayons, pastels, charcoal
• Pencil sharpeners
• Geometry/Colour boxes
• Paper cartons/boxes (corrugated/others)
• Paper moulded trays
• Medicines & Medical Devices
• Many rare-disease & cancer drugs
• All (other) drugs & medicines (incl. ayurveda, unani, siddha, homeopathy)
• Medical oxygen
• DiagnosGc kits & DiagnosGc reagents (Chemicals), Glucometer & Test strips
• Thermometers (medical)
• Medical/surgical instruments
• Surgical rubber gloves
• Farmers & Irrigation
• Tractors (except road tractors for semi-trailers of engine capacity more than 1800 cc)
• Tractor tyres/tubes
• Tractor parts (brakes, gearbox, clutch, wheels, steering, radiator, silencer, hydraulics, fenders/hood etc.)
• Harvesters/Threshers & parts
• Soil-prep & culGvaGon machinery
• Poultry/bee-keeping machinery
• Sprinklers/Drip irrigaGon & nozzles
• Hand pumps (others)
• Composing machines

What gets costlier and comes under the 40 per cent slab?

Union Finance Minister Nirmala Sitharaman said that a 40 per cent slab was applicable on sin and super luxury goods. These include items such as paan masala, tobacco, cigarettes, bidis, aerated water, carbonated and caffeinated beverages, as well as luxury items like motorcycles exceeding 350 cc, yachts, and helicopters. Sitharaman said that 5-7 goods were included in this slab.

Moved to 18%

• Two-wheelers (bikes/scooty ≤350cc)
• Small cars (≤1200cc petrol / ≤1500cc diesel; ≤4m)
• Three-wheelers (autos)
• Passenger vehicles (10+ seats)
• Engine parts, igniGon, pumps (vehicle)
• Bicycles & bicycle parts
• Auto Components
• Home Building & Materials
• Cement
• Marble/TraverGne blocks, Granite blocks, Sand-lime bricks
• ParGcle boards from agri-waste (bagasse, rice husk, jute, sisal etc.)
• Bamboo flooring / joinery
• Packing cases & pallets (wood)
• Consumer Electronics & Appliances
• Television sets (LCD/LED) (> 32’)
• Monitors & Projectors (non-TV
• Air-condiGoners
• Dishwashers
• Solar water heater & systems, Solar cookers
• Toys, Sports & Handicrafts
• Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) [other than electronic toys]
• Wooden/metal/texGle dolls & toys (Channapatna, Thanjavur, Sawantwadi etc.)
• Board games (Ludo/Carrom/Chess/Playing cards)
• Sports goods other than arGcles and equipment for general physical exercise
• Handicraf idols & statues (wood/stone/metal) and lamps (incl. panchloga)
• Brass/Copper/Aluminium artware
• PainGngs, sculptures