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GST 2.0: What gets cheaper and what gets expensive from September 22; check full list
4 min read | Updated on September 22, 2025, 13:07 IST
SUMMARY
The GST reforms, or GST 2.0, are expected to cut down daily expenses for the middle class and expand their purchasing power this festival season.
Soft drinks and aerated & sugary beverages will now attract 40% GST to discourage consumption.
The new GST regime has come into effect, starting from September 22, the first day of Navratri. After the GST council approved a significant overhaul of the previous GST rates – merging the four-slab structure (5%, 12%, 18% and 28%) into a two-slab system of 5% and 18% – the middle class is now expected to get a breather on the onset of the festive season this year.
Many household items, vehicles, medicines and other things will become cheaper from today, as most of the items in the 12% and 28% brackets have moved to the lower 5% and 18% slabs, respectively.
A special 40% slab has been introduced for luxury and sin items, including tobacco products, high-end cars, yachts, etc.
Several essential items have been placed in the 0% slab, meaning that they will not attract any GST.
What is getting cheaper?
- Breads, including roti, pizza base, khakhra, etc, will now attract 0% GST
- Lifesaving medicines will also attract no tax
- Health and life insurance premiums, which previously had 18% GST, are now in the NIL/0% slab
- Electronics used in Indian households, such as ACs and TVs, will attract 18%
| Item / Category | Previous GST Rate(s) | New GST Rate |
|---|---|---|
| Daily essentials: dairy & snacks (pre-packaged namkeens, bhujiya, mixtures) | 12% / 18% | 5% |
| Butter, Ghee | 12% | 5% |
| Milk, paneer, basic dairy, UHT milk, etc. | 12% / 18% | 5% or NIL |
| All Indian breads (chapati, roti, paratha, parotta, khakhra, pizza bread) | 5% / 12% | NIL / 0% |
| Medicines & diagnostic kits / reagents / medical devices | 12% / 18% | 5% |
| Lifesaving medicines (cancer, rare diseases, essential drugs) | 5% / 12% | NIL / 0% |
| Health / Life Insurance Premiums | 18% | NIL / 0% |
| Educational materials (pencils, erasers, exercise books, etc.) | 12% | NIL |
| Personal care & hygiene (shampoo, hair oil, toothpaste, soap bars, shaving cream, toothbrushes) | 18% | 5% |
| Haircuts, salon services, yoga centres, gyms & health clubs | 18% | 5% |
| Electronics & appliances (ACs, large TVs, dishwashers, monitors, projectors) | 28% | 18% |
| Automobiles & two-wheelers (≤ certain capacities) | 28% | 18% |
| Cement & construction materials | 28% | 18% |
What is getting expensive?
- Tobacco products will attract 40% GST (to be implemented later)
- Soft drinks will have 40% GST to discourage consumption
- Luxury and high-end vehicles will attract 40% GST
| Item / Category | Old GST Rate | New GST Rate |
|---|---|---|
| Soft drinks / Aerated & sugary beverages | 28% | 40% |
| Pan masala, Gutkha, Tobacco & allied products | 28% (+ cess) | 40% |
| Luxury & high-end vehicles (motorcycles >350cc, premium cars, SUVs) | 28% | 40% |
| Certain non-alcoholic beverages (flavoured, carbonated, sugary) | 28% | 40% |
| Coal & some coal-based solid fuels | 5% or lower | Up to 18% |
| Premium apparel / textiles (value above ₹2,500 per piece) | 12% | 18% |
| Beauty & grooming services at premium salons and spas | 12% | 18% |
| Restaurant dining at AC / premium outlets | 12% | 18% |
| Premium smartphones and imported gadgets | 12% | 18% |
GST Bachat Utsav
Prime Minister Narendra Modi, in his address on Sunday, September 21, called the new reforms a “GST Bachat Utsav” or GST Savings Festival.
The GST reforms, which are being referred to as GST 2.0, are expected to cut down daily expenses for the middle class and expand their purchasing power this festival season.
As per the advisory by the Department of Consumer Affairs, manufacturers and importers must add new price stickers on unsold products. However, the original price can’t be hidden.
Remember to check the MRP of items before buying and ensure that the price on your receipt matches the price on the item. Be careful when buying from small stores, as they may take longer to update their prices.
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