The GST Council has streamlined the four existing tax slabs (5%, 12%, 18%, and 28%) into just two main slabs: 5% and 18%, effectively abolishing the 12% and 28% categories.
These changes, announced by Finance Minister Nirmala Sitharaman, are set to take effect starting September 22, 2025, coinciding with the onset of Navratri.
A new 40% slab will apply to “super-luxury” and “sin” goods—items such as cigarettes, high-capacity cars, and carbonated beverages.
Everyday consumer goods like soaps, toothpaste, and small cars will benefit from reduced tax rates—some dropping to 5%, others to 18%.
Food staples such as milk, paneer, and chapatis have been made completely tax-free, down from 5%. Packaged snacks, pastas, namkeen, and sauces now fall under the 5% bracket.
Appliances like air conditioners, TVs, dishwashers, cement, and small cars (within size limits) have seen GST reduced from 28% to 18%.
Health and life insurance policies for individuals are now fully exempt from GST.
