GST Rate Cut 2025: What Gets Cheaper and What Gets Costlier

The 56th meeting of the GST Council has introduced a simplified two-tier tax structure. Several essential goods, healthcare products, agricultural equipment, automobiles, and electronic appliances will now become cheaper, while some items are likely to see higher taxes under the rationalised system. Here's the full breakdown.

What Gets Cheaper Under the New GST Rates

Daily Essentials

• Hair oil, shampoo, toothpaste, toilet soap bar, toothbrushes, shaving cream: 18% → 5%
• Butter, ghee, cheese and dairy spreads: 12% → 5%
• Pre-packaged namkeens, bhujia and mixtures: 12% → 5%
• Utensils: 12% → 5%
• Feeding bottles, napkins for babies and clinical diapers: 12% → 5%
• Sewing machines and parts: 12% → 5%

Agriculture and Farmers' Goods

• Tractor tyres and parts: 18% → 5%
• Tractors: 12% → 5%
• Specified bio-pesticides and micro-nutrients: 12% → 5%
• Drip irrigation systems and sprinklers: 12% → 5%
• Agricultural and forestry machinery for soil preparation, cultivation, harvesting and threshing: 12% → 5%

Healthcare Products and Services

• Individual health and life insurance: 18% → Nil
• Thermometers: 12% → 5%
• Medical grade oxygen: 12% → 5%
• All diagnostic kits and reagents: 12% → 5%
• Glucometers and test strips: 12% → 5%
• Corrective spectacles: 12% → 5%

Education Supplies

• Maps, charts and globes: 12% → Nil
• Pencils, sharpeners, crayons and pastels: 12% → Nil
• Exercise books and notebooks: 12% → Nil
• Erasers: 5% → Nil

Automobiles

• Petrol and petrol hybrid, LPG and CNG cars (not exceeding 1200 cc and 4000 mm): 28% → 18%
• Diesel and diesel hybrid cars (not exceeding 1500 cc and 4000 mm): 28% → 18%
• Three-wheeled vehicles: 28% → 18%
• Motorcycles/Bikes (350 cc and below): 28% → 18%
• Motor vehicles for transport of goods: 28% → 18%

Electronic Appliances

• Air conditioners: 28% → 18%
• Televisions above 32 inches (including LED and LCD): 28% → 18%
• Monitors and projectors: 28% → 18%
• Dishwashing machines: 28% → 18%

What Gets Costlier Under the New GST Rates

The government has introduced a new 40% GST slab for luxury and sin goods. This means the following items will become costlier:
• Cigarettes, tobacco products, pan masala and gutkha
• Aerated and energy drinks
• Luxury cars and SUVs
• High-end watches, jewellery and other premium luxury items
• Imported alcohol and spirits

The GST reform will make essentials, agriculture goods, healthcare, education and automobiles cheaper, boosting household savings and supporting farmers and MSMEs. At the same time, luxury and sin goods will attract higher tax, in line with the government's focus on progressive taxation.

This reform ensures that monthly household budgets stretch further. Families save on groceries, healthcare, education, and transport, while luxury consumption continues to be taxed heavily. By prioritising necessities over luxuries, the GST Council has aligned with the needs of India's middle-income population.