GST rate cut: 25 daily-use items that will become cheaper from September 22

Under the new rules, the centre has proposed to simplify the GST structure by keeping only two tax slabs: 5% for essential goods and 18% for standard goods and services. Further, it has been suggested to levy 40% on demerit (luxury and sin) goods. Currently, there are four slabs: 5%, 12%, 18% and 28%.

The reforms are aimed at rationalising and simplifying the existing tax structure. Most goods under the 12% slab have been brought to the lower 5% slab, and most goods in the 28% slab have been pushed to the 18% slab.

After the implementation of the new rates, many daily-use items used by Indian households will get cheaper.

The GST Council on Wednesday, September 3, 2025 decided to accept the Government's proposal for two GST rates.

25 daily-use items to get cheaper before Diwali:

Ahead of the GST Council meeting, a Bank of Baroda report said the GST rejig could provide a major breather for middle-class consumers in the country, with the durable goods sector (including AC, LED/LCD TV, Dishwasher, motor vehicles) and daily-use items expected to get cheaper.

“The migration of major essential items of consumption, especially food items, from the 12% to 5% bracket will provide a major breather for middle-class consumers. The durable goods sector, such as AC, LED/LCD TV, Dishwasher, Motor vehicle and its parts, which have been reeling under pressure for some time, will also get a significant boost as the majority of them have migrated from the 28% slab to the 18% slab,” the report said.

The reforms are also expected to balance the higher tariff impact, and inflation could face downside pressure, the report added.