Big news! What became cheaper after the change in GST slab? See full list

GST New Slab: In GST 2.0 reforms, 12% and 28% slabs were abolished and 5% and 18% main rates were implemented. Now many goods and services like bread, dairy products, clothes, mobile, TV, bike, car, hotel room, gym, salon and health insurance will be cheaper. GST on 33 life saving medicines has been reduced to 5% and on many essential goods to 0%. This will provide relief to the common man, increase consumption and competitive advantage to industries, while 40% tax will continue on luxury and harmful goods.

GST New Slab: Goods and Services Tax (GST) was introduced in India on 1 July 2017, which attempted to simplify and make the tax system transparent by integrating several indirect taxes. GST classified various goods and services into slabs of 0%, 5%, 12%, 18%, and 28%. On 3 September 2025, historic changes were made in the tax structure in the 56th meeting of the GST Council. In this meeting, it was decided to abolish the slabs of 12% and 28% and implement two main slabs (5% and 18%). Along with this, a special slab of 0% on some items and 40% on luxury and harmful goods was kept. This change will be effective from 22 September 2025. Let us know that the impact of the reduction in GST slab on the prices of various goods in India has been analyzed, which includes reduction in GST percentage and reduction in value in rupees.

Change in GST slab Objective

The GST Council abolished the slabs of 12% and 28% to simplify the tax structure and provide relief to consumers. Now most of the items have come in the slab of 5% or 18%, while 0% tax will be applicable on essential goods and 40% on luxury and harmful goods (such as pan masala, tobacco, and luxury vehicles). The aim of this change is to provide relief to the common man and the middle class, boost consumption and give impetus to the economy.

Reduction in GST slab will reduce the prices of these items

The impact of reduction in GST slab can be seen on various sectors such as food, vehicles, electronics, textiles, health, and everyday items.

Food items: All types of bread (paratha, roti, khakhra, pizza bread)

• Earlier GST: 5%
• New GST: 0%
• Impact: GST has been completely abolished on all types of bread. For example, if the price of a packaged khakhra was Rs 100, which included Rs 5 GST. Now it will cost Rs 95.
• Reduction in rupees: At the rate of 5% per package, the price of khakhra will be reduced by about Rs 5.

Cheese, butter, ghee, and dairy spreads

• Earlier GST: 12%
• New GST: 5%
• Impact: The price of dairy products will be reduced by 7%. For example, if 1 kg of paneer was priced at Rs 400, it will cost around Rs 372 after the GST reduction.

Reduction in Rupees: Rs 28 reduction per kg of paneer

• Snacks and Packaged Foods
• Earlier GST: 12%
• New GST: 5%
• Impact: Namkeen, chips, and other packaged foods will become cheaper. For example, GST on a pack of namkeen worth Rs 100 will be reduced from Rs 12 to Rs 5.
• Reduction in Rupees: Rs 7 reduction per pack (priced at Rs 100).

Clothes and Footwear up to Rs 2500

• Earlier GST: 12% (for above Rs 1000)
• New GST: 5%
• Impact: GST on clothes and footwear up to Rs 2500 has been reduced from 12% to 5%. For example, a pair of shoes costing Rs 2000 would attract GST of Rs 240 earlier, which would now be Rs 100.
• Reduction in Rupees: Reduction of Rs 140 per item (priced at Rs 2000).

Man-made Fibres (MMF) and Yarns

• Earlier GST: 18% (fibre) and 12% (yarn)
• New GST: 5%
• Impact: The textile industry, especially MSMEs, would benefit as the reduction in cost would make fabrics cheaper. For example, GST on a saree costing Rs 1000 would be reduced from Rs 180 to Rs 50.
• Reduction in Rupees: Reduction of Rs 130 per item (priced at Rs 1000).

Small cars: 1200 cc petrol, 1500 cc diesel, less than 4000 mm

• Earlier GST: 28% + 1-3% cess
• New GST: 18% + 1-3% cess
• Impact: On-road price of small cars will reduce by around 10%. For example, Maruti Suzuki Wagon R (Rs 7 lakh on-road) may see a price reduction of around Rs 70,000.
• Price reduction: Rs 60,000 to Rs 1,30,000 (depending on the price of the car).

Motorcycles up to 350 cc

• Earlier GST: 28%
• New GST: 18%
• Impact: Price reduction of bikes of companies like Bajaj and Royal Enfield will see a 6-8% reduction. For example, GST on a bike worth Rs 2 lakh will come down from Rs 56,000 to Rs 36,000.
• Reduction in rupees: Rs 20,000 (on a price of Rs 2 lakh).

TVs up to 32 inches, ACs, Refrigerators, Washing Machines

• Earlier GST: 28%
• New GST: 18%
• Impact: The price of home appliances will be reduced by 10%. For example, the GST on a TV priced at Rs 50,000 will be reduced from Rs 14,000 to Rs 9,000.
• Reduction in rupees: Rs 5,000 (on a price of Rs 50,000).

Mobile phones

• Earlier GST: 18%
• New GST: 5%
• Impact: The price of mobile phones will be reduced by 13%. For example, the GST on a phone priced at Rs 20,000 will be reduced from Rs 3,600 to Rs 1,000.
• Reduction in rupees: Rs 2,600 (on a price of Rs 20,000).

33 Life Saving Drugs

• Earlier GST: 12%
• New GST: 5%
• Impact: Reduction in the price of life saving drugs will provide relief to patients. For example, GST on a medicine costing Rs 1,000 will be reduced from Rs 120 to Rs 50.
• Reduction in Rupees: Rs 70 (on a price of Rs 1,000).

Health and Life Insurance (up to Rs 5 lakh)

• Earlier GST: 18%
• New GST: 0%
• Impact: GST completely abolished on health and term insurance policies costing up to Rs 5 lakh. For example, GST of Rs 1,800 was earlier applicable on a premium of Rs 10,000, which will now be zero.
• Reduction in Rupees: Rs 1,800 (on a premium of Rs 10,000).

Toothpaste, Shampoo, Soap, Hair Oil

• Earlier GST: 18%
• New GST: 5%
• Impact: Personal care products will become cheaper. For example, GST on shampoo worth Rs 200 will be reduced from Rs 36 to Rs 10.
• Reduction in Rupees: Rs 26 (on a price of Rs 200).

Kitchen Utensils

• Earlier GST: 12%
• New GST: 5%
• Impact: Price of kitchen utensils will be reduced. For example, GST on utensil set worth Rs 1,000 will be reduced from Rs 120 to Rs 50.
• Reduction in Rupees: Rs 70 (on a price of Rs 1,000).

Tractors, Threshing Machines, Manure Making Machines

• Earlier GST: 12%
• New GST: 5%
• Impact: Cheaper equipment will be available to farmers. For example, GST on tractor worth Rs 5 lakh will be reduced from Rs 60,000 to Rs 25,000.
• Reduction in Rupees: Rs 35,000 (on a price of Rs 5 lakh).

Renewable energy equipment

• Earlier GST: 12%
• New GST: 5%
• Impact: Solar panels and other renewable energy equipment will become cheaper. For example, GST on a solar panel worth Rs 50,000 will be reduced from Rs 6,000 to Rs 2,500.
• Reduction in Rupees: Rs 3,500 (on a price of Rs 50,000).

Hotel rooms up to Rs 7,500

• Earlier GST: 12%
• New GST: 5%
• Impact: Hotel stays will become cheaper, which will boost tourism. For example, GST on a room worth Rs 5,000 will be reduced from Rs 600 to Rs 250.
• Reduction in Rupees: Rs 350 (on a price of Rs 5,000).

Gyms, salons, yoga centres

• Earlier GST: 18%
• New GST: 5%
• Impact: Personal healthcare services will become cheaper. For example, GST on a Rs 1,000 gym membership will be reduced from Rs 180 to Rs 50.
• Reduction in rupees: Rs 130 (on a price of Rs 1,000).

Economic and social impact

• Consumer relief: The reduction in GST slabs will increase disposable income for the common man and the middle class, leading to higher consumption. This is particularly applicable to daily use items such as food items, personal care products, and healthcare services.
• Industry benefits: Cost reduction in sectors such as textiles, automotive, and hospitality will increase competitiveness. MSMEs will particularly benefit as inversion and working capital problems will be reduced.
• Agriculture and environment: GST reduction on agricultural equipment and renewable energy equipment will boost farmers and environmental initiatives.
• Revenue concerns: Opposition states have raised concerns that the reduction in GST slabs could lead to a 15-20% revenue loss (Rs 1.5-2 lakh crore). The central government has proposed to provide compensation for up to 5 years to make up for the revenue loss.

Massive benefits to consumers

The reduction in GST slabs will provide massive relief to consumers and industries in India. There will be a significant reduction in prices in sectors such as food, textiles, vehicles, electronics, health, and hospitality, which will increase the purchasing power of the common man. However, coordination between the Center and the states is necessary to address the concerns of revenue reduction. This reform will not only boost economic growth but will also make the tax system more transparent and consumer-friendly.

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