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  5. GST rate cut 2025: What gets cheaper? A look at items attracting nil, 5% or 18% tax

Business News

GST rate cut 2025: What gets cheaper? A look at items attracting nil, 5% or 18% tax

Kamal Joshi
By Kamal Joshi

3 min read | Updated on September 04, 2025, 07:10 IST

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SUMMARY

GST rate cut 2025: The financial minister said that a special 40% GST tax slab is proposed for a select few items like high-end cars, tobacco and cigarettes.

Erasers, pencil sharpeners, maps, and exercise books will be charged at nil from 5% GST. | Image: PIB

Erasers, pencil sharpeners, maps, and exercise books will be charged at nil from 5% GST. | Image: PIB

GST rate cut 2025: The GST Council, headed by Union Finance Minister Nirmala Sitharaman, on Wednesday, September 3, gave thumbs up to a two-tier GST rate structure of 5% and 18%. The new rates will come into effect from September 22, 2025.

"This reform is not just on rationalising rates, it's also on structural reforms, ease of living, so that businesses can work together with great ease. We have corrected inverted duty structure problems, we have resolved classification related issues, and we have ensured there will be stability and predictability about the GST reforms," Sitharaman said.
Here's a look at items that will attract 18%, 5% or nil GST.

GST rate cut 2025: Daily essential items get cheaper

ItemsFromTo
Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, Shaving Cream18%5%
Butter, Ghee, Cheese & Dairy Spreads12%5%
Pre-packaged Namkeens, Bhujia & Mixtures12%5%
Utensils12%5%
Feeding Bottles, Napkins for Babies & Clinical Diapers12%5%
Sewing Machines & Parts12%5%

GST rate cut 2025: Relief in healthcare sector

ItemsFromTo
Individual Health & Life Insurance18%Nil
Thermometer18%5%
Medical Grade Oxygen12%5%
All Diagnostic Kits & Reagents12%5%
Glucometer & Test Strips12%5%
Corrective Spectacles12%5%
Buzzing | GST Council approves two-tier tax structure; new rates effective from September 22

GST rate cut 2025: Education becomes affordable

ItemsFromTo
Maps, Charts & Globes12%Nil
Pencils, Sharpeners, Crayons & Pastels12%Nil
Exercise Books & Notebooks12%Nil
Eraser5%Nil

GST rate cut 2025: Big boost to farmers and agriculture sector

ItemsFromTo
Tractor Tyres & Parts18%5%
Tractors12%5%
Specified Bio-Pesticides, Micro-Nutrients12%5%
Drip Irrigation System & Sprinklers12%5%
Agricultural, Horticultural or Forestry Machines for Soil Preparation, Cultivation, Harvesting & Threshing12%5%

GST rate cut 2025: Auto sector gets relief

ItemsFromTo
Petrol & Petrol Hybrid, LPG, CNG Cars (not exceeding - 1200 cc & 4000mm)28%18%
Diesel & Diesel Hybrid Cars (not exceeding - 1500 cc & 4000mm)28%18%
3 Wheeled Vehicles28%18%
Motor Cycles (350 cc & below)28%18%
Motor Vehicles for transport of goods28%18%

GST rate cut 2025: Prices of electrical appliances ease

ItemsFromTo
Air Conditioners28%18%
Television (above 32") (including LED & LCD TVs)28%18%
Monitors & Projectors28%18%
Dish Washing Machines28%18%

The financial minister said that a special 40% GST tax slab is also proposed for a select few items like high-end cars, tobacco and cigarettes.

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About The Author

Kamal Joshi
Kamal Joshi is a business journalist who covers industries, markets, and IPOs. He is passionate about breaking news and enjoys playing tennis, especially flexing his backhand. He was previously associated with Republic TV and LatestLY.