India’s GST regime is set for its biggest transformation since 2017, as sweeping reforms come into effect on 22 September 2025, ushering in a new era of simplicity and transparency for businesses and consumers alike.
Two Main Slabs: Most goods and services will now fall under 5% or 18% GST, replacing the previous 12% and 28% rates.
Sin/Luxury Goods: A new 40% GST slab targets items like luxury vehicles, cigarettes, and select beverages.
Cheaper Essentials: Major rate cuts for food items, electronics, healthcare, and lifestyle goods ensure direct relief to households.
Compliance: MSMEs benefit from simplified filings, faster refunds, and easier processes for registration and input credit.
New GST Rate on Essential Food Items
Item
Revised GST Rate
Previous Rate
UHT (Ultra High Temperature) Milk
0%
5%
Pre-packaged & labelled Chhena/Paneer
0%
5%
Roti
0%
5%
Pizza bread
0%
5%
Khakhra
0%
5%
Condensed milk
5%
12%–18%
Butter
5%
12%–18%
Ghee
5%
12%–18%
Cheese
5%
12%–18%
Dairy spreads
5%
12%–18%
Chocolates
5%
18%
Pasta
5%
18%
Baked goods
5%
12%–18%
Namkeens
5%
12%–18%
New GST Rate on Dry Fruits, Spices & Other Ingredients
Item
Revised GST Rate
Previous Rate
Dried nuts
5%
12%–18%
Dried fruits
5%
12%–18%
Malt
5%
12%–18%
Starches
5%
12%–18%
Vegetable extracts
5%
12%–18%
Sausages
5%
12%–18%
Sugar products
5%
12%–18%
New GST Rate on Beverages (Sugary, Aerated & Caffeinated)
Item
Revised GST Rate
Previous Rate
Packaged coconut water
40%
18%–28%
Soya milk drinks
40%
18%–28%
Other non-alcoholic sugary beverages
40%
18%–28%
Caffeinated beverages
40%
28%
Carbonated fruit drinks
40%
28%
New GST Rate on Sin Goods
Item
Revised GST Rate
Previous Rate
Pan masala
40%
28% + Cess
Tobacco products
40%
28% + Cess
Cigars
40%
28% + Cess
Cigarettes
40%
28% + Cess
Bidis
18%
28% + Cess
New GST Rate on Industrial Goods (Cement, Coal, etc.)
Item
Revised GST Rate
Previous Rate
Cement (Portland, slag, etc.)
18%
28% + Cess
Coal, lignite, peat
18%
5%
New GST Rate on Healthcare & Medical Supplies
Item
Revised GST Rate
Previous Rate
Medical-grade oxygen
5%
12%
Diagnostic kits
5%
12%
Essential drugs
5%
12%
Reagents
5%
12%
Surgical supplies
5%
12%
New GST Rate on Lifestyle & Household Items
Item
Revised GST Rate
Previous Rate
Personal care items
5%
12%–18%
Toiletries
5%
12%–18%
Furniture
5%
12%–18%
Handicrafts
5%
12%–18%
Utensils
5%
12%–18%
Toys
5%
12%–18%
Musical instruments
5%
12%–18%
New GST Rate on Automobiles & Luxury Vehicles
Item
Revised GST Rate
Previous Rate
Motorcycles up to 350cc
18%
28%
Scooters
18%
28%
Small cars
18%
28%
Bicycles
18%
28%
Motorcycles above 350cc
40%
28% + Cess
Luxury cars
40%
28% + Cess
Aircraft
40%
28% + Cess
Yachts
40%
28% + Cess
Pistols
40%
28% + Cess
New GST Rate on Entertainment & Services
Item
Revised GST Rate
Previous Rate
Cinema tickets (≤ ₹100)
5%
12%
Cinema tickets (> ₹100)
40%
18%–28%
Insurance premiums (life, health, general)
0%
18%
Private tuition
0%
18%
Vocational courses
0%
18%
Charitable hospital services
0%
12%
Charitable education services
0%
12%
Hotels (₹1,001–₹7,500 per night)
5%
12%
Beauty & wellness (salons, gyms, spas)
5%
18%
Why This Matters
This reform, called GST 2.0, is designed to lower the tax burden, make prices more predictable, support MSMEs, and foster industry growth. Essentials and industrial inputs get cheaper, while luxury and sin items attract higher taxes—helping both consumers and government revenue.
Stay up to date for further sector-wise updates, detailed HSN code notifications, and practical guides for business adaptation to GST 2.0.
