List of Items Getting Cheaper with New GST Rates in India (2025)
India has recently updated its Goods and Services Tax (GST) rates to make things simpler and more affordable for the common man. With effect from September 22, 2025, many everyday items have seen their tax rates reduced, which means lower prices for consumers! Let's break down what this means in simple terms.
What is GST?
GST is a tax we pay when we buy goods or services. Earlier, GST had multiple tax slabs like 5%, 12%, 18%, and 28%. Now, the government has simplified these into mainly three slabs:
- 0% for essentials and some exempt items
- 5% for many daily-use and essential goods
- 18% for standard goods and services
- A special 40% for luxury and sin goods like expensive cars and tobacco
Items That Will Get Cheaper
Here’s a list of common items whose GST rates have been reduced, making them more affordable:
| Item | Old GST Rate | New GST Rate | Example |
|---|---|---|---|
| Hair oil, shampoo, toothpaste | 18% | 5% | Your daily shampoo and toothpaste |
| Butter, ghee, cheese | 12% | 5% | Dairy products like butter & cheese |
| Processed snacks & bakery items | 12% / 18% | 5% | Biscuits, packaged breads |
| Stationery items like notebooks | 12% | 5% or Nil | School notebooks and pencils |
| Household cleaners & detergents | 12% / 18% | 5% | Detergents for washing clothes |
| Agriculture equipment | 12% / 18% | 5% | Tractors, drip irrigation systems |
| Small cars below 1200cc | 28% | 18% | Compact cars used by families |
| Air conditioners & TVs | 28% | 18% | ACs and LED TVs over 32 inches |
Simple Examples for You
- Previously, if you bought shampoo costing ₹100, you paid ₹18 as GST. Now, you pay only ₹5, saving ₹13!
- Butter earlier had 12% GST. For a ₹100 pack, you paid ₹12 tax, but now it's only ₹5.
- Small cars are now taxed at 18% instead of 28%, which means buying affordable family cars will cost less in taxes.
Problems You Might Face
While the new GST rates are designed to help, here are some issues that consumers and businesses might encounter:
- Confusion in classification: Some items may be wrongly classified leading to mistakes in GST rates.
- Adjustment in pricing: Retailers and manufacturers may take time to revise prices to reflect GST changes, so the benefit may not be immediate.
- Compliance challenges for businesses: Businesses must update billing and accounting software to the new GST slabs, which might cause initial hiccups.
- Luxury and sin goods: Certain items like tobacco and high-end cars now have a higher GST rate of 40%, increasing their prices.
What To Keep in Mind
- Always check the GST rates at the time of purchase as the transition period might have mixed rates.
- Keep your bills safe; GST rates might affect warranty and return policies based on invoicing.
- Follow government updates and GST council announcements for the latest changes.
The new GST reform aims to simplify the tax system, reduce the burden on daily essentials, and make life easier for everyone!
