New GST rates: Full list of items that have received rate cut

New Delhi: In a significant overhaul of the Goods and Services Tax (GST) regime, the GST Council on Wednesday approved a two-tier rate structure of 5% and 18%, replacing the earlier four-slab system. The new rates will be effective from September 22, 2025.

Announcing the changes, Union Finance Minister Nirmala Sitharaman said the move aims to simplify the tax structure and reduce the tax burden on common people, particularly on daily-use items.

“Every decision was taken unanimously. These reforms focus on easing the burden on the common man,” said Sitharaman.

The Council has also proposed a special 40% GST slab for high-end and sin goods like luxury cars, tobacco, and gambling-related activities.

✅ GST Reforms Summary

Old structure: 5%, 12%, 18%, and 28%

• New structure: Only 5% and 18% slabs remain
• Special slab: 40% GST on select luxury and sin goods
• Effective from: September 22, 2025
• Estimated revenue loss: ₹47,700 crore, according to West Bengal minister Chandrima Bhattacharya

📃 Complete List of Revised GST Rates

🟢 0% GST – Tax-Free Items

These items will now be exempt from GST:

• 33 Life-saving medicines, including cancer and rare disease treatments
• Individual life and health insurance policies
• School essentials: Pencils, sharpeners, crayons, pastels, erasers, exercise books, notebooks, maps, charts, globes
• Dairy & food items: Ultra-High Temperature (UHT) milk, paneer (chena), pizza bread, khakhra, chapati or roti

🟡 5% GST – Essential & Household Items

• Personal care: Hair oil, shampoo, toothpaste, toilet soap, toothbrush, shaving cream
• Food & dairy: Butter, ghee, cheese, namkeens
• Kitchenware: Utensils
• Infant care: Baby feeding bottles, napkins, clinical diapers
• Medical items: Thermometers, medical oxygen, diagnostic kits, glucometers & test strips, corrective spectacles
• Agriculture: Tractor tyres and parts, tractors, bio-pesticides, micro-nutrients
• Irrigation: Drip irrigation systems, sprinklers
• Machinery: Agricultural, horticultural, or forestry equipment for soil preparation
• Sewing machines and parts

🟠 18% GST – Standard Goods & Vehicles

• Vehicles:
  • Petrol, LPG, CNG cars (≤1200cc & ≤4000mm)
  • Diesel cars (≤1500cc & ≤4000mm)
  • Motorcycles (up to 350cc)
  • 3-wheeled vehicles
  • Goods transport vehicles
• Appliances: Air conditioners, dishwashers
• Electronics: TVs above 32 inches, LED/LCD TVs, monitors, projectors
• Heavy vehicles: Road tractors with engine capacity >1800cc

🔴 40% GST – Luxury & Sin Goods

This special slab targets goods and services considered either luxury or socially harmful:

• Tobacco-related: Cigarettes, gutka, pan masala, chewing tobacco, bidis
• Beverages: Aerated drinks with added sugar/flavour, caffeinated and energy drinks
• Others:
  • Motorcycles exceeding 350cc
  • Smoking pipes
  • Personal-use aircraft, yachts
  • Revolvers, pistols
  • Gambling-related: Betting, casinos, horse racing, online gaming, lotteries

🔍 What Happens Next?

The GST Council will monitor the impact of these changes on state revenues, particularly in light of the estimated losses. The government has also promised further streamlining of compliance for small businesses and MSMEs in the next phase of reforms.

For the full list of items, click here.

Source: Union Finance Ministry Press Briefing | GST Council Updates