GST Overhaul 2025: Essentials at 0%, Daily Goods at 5%, Appliances at 18%, Luxury at 40%
The Voice of Chandigarh
India has rolled out its biggest GST reform since 2017, slashing tax rates on hundreds of items to make essentials cheaper and simplify the overall structure. Effective September 22, 2025, the GST regime will now have four clear slabs—0%, 5%, 18%, and 40%—benefiting households, businesses, and consumers ahead of the festive season.
0% GST – Essentials Now Tax-Free
- Paneer, khakra, chapati, UHT milk
- Life-saving drugs, cancer medicines
- Life & health insurance premiums
- Stationery: pencils, notebooks, erasers, globes
5% GST – Daily Needs & Basic Goods
- Soap, shampoo, toothpaste, hair oil
- Butter, ghee, cheese, dry fruits, condensed milk
- Utensils, bicycles, feeding bottles, sewing machines
- Agricultural machinery, fertilisers
- Economy air tickets & hotel rooms under ₹7,500
18% GST – Appliances & Vehicles
- Air conditioners, refrigerators, washing machines, TVs
- Laptops, dishwashers
- Small cars, motorcycles ≤350cc, three-wheelers
- Cement, auto parts, ambulances
40% GST – Luxury & Sin Goods
- Cigarettes, gutkha, pan masala, sugary drinks
- High-end motorcycles (>350cc), luxury cars
- Yachts, private aircraft, gambling services
Why It Matters
Finance Minister Nirmala Sitharaman said the overhaul will simplify compliance and lower costs for families. Experts project inflation could fall by 1.1 percentage points, while GDP may gain up to 1.2%.
With essentials tax-free, daily goods at 5%, appliances at 18% and luxury at 40%, the new GST is designed to make basic living more affordable while keeping luxury spending under tight taxation.
