New GST Rates 2025: Updated List, Cheaper & Dearer Items | Full Guide

New GST Rate Updates 2025: Save More Starting September 22

Starting today, September 22, 2025, India has launched a major overhaul in GST rates — a reform popularly called GST 2.0. This update has simplified the previous four-tier system into three key slabs — 0%, 5%, and 18% — with a new steep 40% slab for luxury and sin goods. What exactly does this mean for consumers and businesses alike? Many everyday essentials have become cheaper, while some luxury goods carry a higher tax burden. Here’s a detailed guide on the new GST rates, the items affected, and the purchasing impact to expect during this festive season savings period.

What’s New in GST 2025?

• A simplified tax structure with 5% for essentials and daily-use goods, 18% for most goods and services, and 40% on luxury & sin goods like tobacco, aerated drinks, premium vehicles, and online betting.

• Major reduction in GST for household staples, medicines, and agricultural equipment.

• Significant GST cut on consumer electronics (previously taxed at 28%, now 18%), making appliances more affordable.

• Higher GST on clothes priced above ₹2,500 (now 18% vs previous 12%).

• Some luxury vehicles and bikes now taxed at 40% instead of 28%.

Items Now Cheaper After GST Reforms

Category	Old GST Rate	New GST Rate	Notes
Roti, Parantha, Khakra	5-12%	0%	Basic staple foods tax-free
Paneer, Milk & Dairy Products	5-18%	0-5%	Butter, ghee at 5%; paneer tax-free
Chocolates, Bread, Pasta	12-18%	5%	Major food items become affordable
Soaps, Shampoos, Household Cleaning	18%	5%	Cheaper hygiene products
Medicines and Healthcare Services	12-18%	0-5%	Life-saving drugs exempt
Consumer Electronics	28%	18%	Price drop on appliances
Footwear under ₹2,500	18%	5%	Low-cost shoes cheaper

Items That Became Dearer

Category	Old GST Rate	New GST Rate	Notes
Clothes above ₹2,500	12%	18%	Higher tax on premium clothing
Aerated Drinks	18-28%	40%	‘Sin’ goods heavily taxed
Luxury Cars & Bikes	28%	40%	High GST on luxury vehicles
Online Gaming, Betting	Varied	40%	New high tax on gambling

How This Affects You

• Households buying staples, medicines, and daily essentials will see lower prices and tax savings.

• Buyers of electronic goods and appliances can expect around 8-10% price drops due to GST cuts.

• Luxury purchases like high-end vehicles, premium apparel, and soft drinks will become more expensive.

• Businesses need to update GST invoicing software and systems to reflect these rates from today.

Internal Resources for GST Compliance and News

• GST Compliance Tips for MSMEs

• Latest GST Rate Updates and Notifications

• How To File GST Returns Easily in 2025

External Authoritative Links

• Official GST India Portal: gst.gov.in [gov]

• Finance Ministry Notifications: finmin.nic.in [gov]

• Economic Times GST Live Updates: economictimes.indiatimes.com

FAQ: New GST Rates 2025

What are the new GST rates effective 22 September 2025?

GST now has three main slabs: 5% for essentials, 18% for most goods and services, and 40% for luxury and sin items like tobacco, aerated drinks, and high-end cars.

Which items have become cheaper due to the GST changes?

Staple foods like roti and paneer, medicines, household cleaning products, and consumer electronics have seen a significant reduction in GST rates making them more affordable.

Who benefits most from the new GST structure?

Consumers, especially middle-class families and daily wage earners, benefit from reduced prices on essential goods, while luxury and non-essential goods have a higher tax to discourage excess consumption.

Conclusion: A Turning Point for Indian Taxation & Consumer Savings

The GST 2.0 reform coming into effect today marks a new chapter in India’s indirect tax system — simpler, fairer, and more transparent. As the festive season begins alongside these reforms, many consumers will enjoy lower prices on essentials and electronics, boosting household savings. However, the higher tax on luxury and sin goods reflects the government's intent to curb excesses and generate revenue responsibly. Staying updated with these changes empowers consumers and businesses to plan better and comply effortlessly.

For continuous updates and expert GST insights, visit abhinandps.com and prepare to maximize savings this festive season!