On 17 September 2025, the Ministry of Finance (Department of Revenue) issued a series of notifications revising the Goods and Services Tax (GST) rates pursuant to the decisions taken in the 56th Meeting of GST Council. These revisions will come into effect from 22 September 2025.
The current four-tier GST rate structure has been rationalised into a 'Simple Tax' with a Standard Rate of 18% and a Merit Rate of 5%, along with a special demerit rate of 40% applicable to luxury items and 'sin' goods. Nil and exempt categories have been streamlined, and certain niche rates, such as 3% and 0.25%, continue to apply to items like gold, silver, diamonds, and jewellery.
These revised GST rates apply to a wide and diverse range of goods and services. For ease of reference, we have compiled the updated rates specifically for the items that are most commonly used in day-to-day life.
1. Goods rated as NIL (Exempted Goods)
| Sector | Goods | Old Rate | New Rate |
|---|---|---|---|
| Stationary Items | Printed maps, hydrographic charts, atlases, and globes, Pencil sharpeners, Writing instruments (pencils, crayons, pastels), Notebooks. | 12% | Nil |
| Food | UHT milk, pre-packaged paneer, pizza bread, khakhra, chapathi, and roti, Fresh/dried black pepper & dried raisins (when supplied by agriculturist) | 5% | Nil |
| Paratha, parotta, and other Indian breads | 18% | Nil | |
| Health & Insurance | All individual health and life insurance policies and reinsurance | 18% | Nil |
| 33 drugs and medicines | 12% | Nil |
2. Goods and Services rated at 5% GST
| Category | Goods/Services | Old Rate | New Rate |
|---|---|---|---|
| Daily Essentials & Personal Care | Hair Oil, Shampoo, Toothpaste, Toilet Soap, Toothbrushes, Shaving Cream, Talcum Powder & Face Powder | 18% | 5% |
| Feeding Bottles, Baby Napkins & Clinical Diapers | 12% | 5% | |
| Food & Beverages | Butter, Ghee, Cheese, Dairy Spreads, Condensed Milk, Dairy Fats, Pre-packaged Namkeens, Bhujia, Mixtures, Extruded Snacks, Jams, Jellies, Sauces, Seasonings, Fruit & Vegetable Juices, Pre-packaged Tender Coconut Water. | 12% | 5% |
| Soya Milk Drinks, Plant-based Milk, Bottled Drinking Water, Biscuits, Bread, Cereal Flakes, Baked Goods, Ice Cream & Edible Ice. | 18% | 5% | |
| Household Goods | Utensils, Kitchen & Tableware, Furniture, Lanterns, Lamps | 12% | 5% |
| Medical apparatus | Medical Grade Oxygen, Corrective Spectacles or Glasses, Glucometer & Test Strips, Medical Gloves, Bandages, Dressings | 12% | 5% |
| Services | Hotel Stays (≤ ₹7500 per day), Film Tickets (≤ ₹100) | 12% | 5% |
| Beauty & Physical Well-being Services (salons, spas) | 18% | 5% |
3. Goods and Services rated at 18% GST
| Category | Goods/Services | Old Rate | New Rate |
|---|---|---|---|
| Consumer Electronics | Air-conditioning machines (with fans & humidity control), Household dish washing machines, Television sets, monitors, projectors, Personal use dutiable articles (general electronics/appliances). | 28% | 18% |
| Vehicles | Small petrol/LPG/CNG cars (≤1200 cc, ≤4000 mm), Small diesel cars (≤1500 cc, ≤4000 mm), Hybrid vehicles (≤1200/1500 cc, ≤4000 mm), Motorcycles (≤350 cc), mopeds, scooters, Motor vehicle seats, parts, and accessories, New pneumatic tyres of rubber (except bicycles) | 28% | 18% |
| Clothing & Footwear | Apparel & accessories above ₹2500 | 12% | 18% |
| Footwear valued above ₹2500 per pair | 18% | 18% | |
| Travel Services | Air travel (business/first class, other than economy), Passenger transport by cab/bus with fuel included (if operator not in same line of business), Renting of motor vehicles with operator (fuel included), Renting of goods carriage with operator. | 12% | 18% |
4. Goods and Services rated at 40% GST
| Category | Goods/Services | Old Rate | New Rate |
|---|---|---|---|
| Beverages & Sin Foods | Sugary & flavoured beverages (incl. carbonated drinks), Carbonated fruit-based beverages / with fruit juice, Caffeinated beverages | 28% | 40% |
| Other non-alcoholic beverages (specialty/high-sugar types) | 18% | 40% | |
| Tobacco & Related Products | Cigarettes, cigars, cheroots, cigarillos, Unmanufactured tobacco, tobacco refuse (excluding leaves), Other manufactured tobacco & substitutes (chewing tobacco, reconstituted tobacco, essences), Products with tobacco/nicotine substitutes. | 28% | 40% |
| Vehicles (Luxury & Premium) | Motor cars & passenger vehicles (luxury category, other than small cars), Hybrid vehicles (engine >1200/1500 cc or length >4000 mm), Motorcycles >350 cc (premium bikes, e.g., Royal Enfield 650cc, Harley Davidson) | 28% | 40% |
| Leisure & Gaming Services | Admission to casinos, race clubs, sporting events (e.g., IPL tickets in high-value categories), Specified actionable claims: betting, casinos, gambling, horse racing, lottery. | 28% | 40% |
These revised GST rates are significant not only for consumers but also for the providers of goods and services, as the new regime introduces an additional layer of tax compliance and reporting requirements.
Businesses will need to reassess pricing, input tax credit management, and invoicing processes to ensure full compliance under the simplified rate structure. Staying informed and proactively adapting to these changes will be key to minimising risk and optimising operational efficiency.