GST or Goods and Services Tax is something we all pay whenever we buy goods or use services. From groceries to mobile bills, GST directly affects how much we spend. The Government of India has announced a big change in September 2025- the Next-Gen GST Reform. The new GST rate list is set to help the common man by cutting the tax rates and making things simpler and easier for both consumers and businesses.
Overview of Current GST Tax Slabs (2025)
As of now, GST in India has the following major slabs:
- 0% (Exempt): Essential daily needs such as fresh fruits, vegetables, milk, bread, etc.
- 5% GST Slab: Common goods such as packaged food.
- 12% GST Slab: Processed food, fruit juices, frozen meat, butter, ghee, nuts, etc.
- 18% GST Slab: Most services like restaurants, telecom and banking, cosmetics, toiletries, hair oil, toothpaste, and capital goods.
- 28% GST Slab: Electronic goods such as TVs and refrigerators, small cars and bikes, cement, paints, high-end luxury, premium cars and bikes, and sin goods like tobacco.
New GST Tax Slabs (Effective From 22nd September 2025)
Now, with the GST Council giving a green flag to new GST rates, here are the new GST slabs:
- 0% GST: Along with daily essentials, exemption now also includes personal Health and Life Insurance, exercise books & notebooks, and maps & charts.
- 5% GST Slab: Packaged food, footwear, medicines, small household items, and other commonly used products.
- 18% GST Slab: Restaurant services, telecom services, financial services, electronics like TVs, washing machines, laptops and daily-use appliances, motorcycles below 350cc, and cars below 1200cc.
Note: A special 40% GST slab is introduced for luxury and sin goods such as high-end cars and tobacco products.
Also Read : GST On Personal LoanKey Components of the 2025 GST Reform
- Easy structure with fewer GST rates to avoid confusion.
- Daily-use items at a lower tax and luxury at higher rate.
- Easier for people and businesses to file GST returns online.
Simplification to Two Main Slabs: 5% & 18%
Currently, most of the items are stuck between 12% and 28% slabs. However, with the new GST slab, effective from 22nd September 2025, they will shift to 5% and 18%.
Current GST Tax Rate Vs New GST Tax Rate
Here’s the comparison table of the GST new rate list with the old rate list for you to understand what gets cheaper:
| Items | Current GST Tax Rate (Till 21st Sep 2025) | New GST Tax Rate (From 22nd Sep 2025) |
| Daily Essentials- Milk, Bread, Curd, etc. | Nil | Nil |
| Hair Oil, Shampoo, Toiletries, etc. | 18% | 5% |
| Butter, Ghee, and Cheese | 12% | 5% |
| Personal Health & Life Insurance | 18% | Nil |
| Air Conditioners | 28% | 18% |
| Tv & Refrigerator | 28% | 18% |
| Small Cars Below 1200cc | 28% | 18% |
| Bikes Below 350cc | 28% | 18% |
| Tableware, Kitchenware, Utensils & Bamboo Furniture | 12% | 5% |
| Stationery Items- Pencils, Charts, Globes, Exercise Books & Notebooks | 12% | 5% |
| Cement | 28% | 18% |
| Hotel Tariffs Up To ₹7500 | 12% | 5% |
| Agriculture Machinery- Tractors, Drip Irrigation Systems, Sprinklers, etc. | 12% | 5% |
| Aerated and Sugary Beverages, Caffeinated Beverages | 28% | 40% |
| Luxury Cars and Premium Bikes | 28% | 40% |
| Tobacco, Cigarettes, and Other Sin Goods | 28% | 40% |
What’s Cheaper, What’s Costlier in the Updated GST Rate List
What’s Cheaper: Personal health and life Insurance, daily essentials like hair oil and shampoo, packaged food, footwear, small automobiles like cars and bikes, and household appliances like AC, TV, and washing machine.
What’s the Same: Daily essential items like milk, bread, and vegetables, most services under 18% GST like restaurant services, financial services, and education.
What’s Costlier: Luxury vehicles, tobacco, and high-end lifestyle products.
Timeline: When These Changes Roll Out
The GST Council has announced that the new GST slab changes will be effective from 22nd September 2025.
Also Read : How to file GST ReturnConclusion
The GST new rate list 2025 is all about simplifying the tax system. With just two main slabs (5% and 18%), a 0% slab for essentials, and a 40% slab for luxury goods, the GST structure is now easier to understand.
Meanwhile, if you need quick financial support to manage your household expenses and emergency bills, then you can avail instant personal loans of up to ₹3 lakh. Just download the CASHe app, apply online, and get the loan approved within minutes.
