Editor’s Note
The GST Council has approved a major simplification of India’s tax structure, reducing it to two primary rates. This article outlines the key changes from the recent meeting and their intended impact.
GST is the most significant tax reform in the country. It unified the taxation structure and replaced the multiple indirect taxes of the previous regime. The GST Council meets regularly to review and revise GST rates on various goods and services.
In the 56th GST Council meeting held on September 3, 2025, a major overhaul was approved. The Council simplified the structure by reducing it to two main slabs, 5% and 18%, along with a new 40% slab for luxury and sin goods. This move aims to bring clarity, reduce complexity, and ease compliance for businesses and consumers.
CBIC advises people that if they have not received the benefit of the new GST rate, they can raise a complaint through multiple channels, such as calling the National Consumer Helpline (NCH) on the toll-free number 1915, sending a WhatsApp message to 8800001915, or submitting a complaint via the INGRAM portal.
In the 56th GST Council meeting, the central government announced the removal of 12% and 28% GST rates and shifted several goods to the 5% and 18% slabs to provide relief to consumers.
Effective from September 22, 2025, the new GST structure will make several essential items cheaper for households and rationalise rates on automobiles, appliances, and other consumer goods. Under the revised structure:
– 5% slab will cover essentials like food products, medicines, milk-based items, EVs, and insurance.
– 18% slab will apply to standard goods like electronics, cement, vehicles, and apparel.
– 40% slab will be imposed on luxury and sin goods such as aerated drinks, and premium cars.
– CGST – Central GST
– SGST – State GST
– IGST – Integrated GST
The government recently wanted to change the GST rates and wanted to keep them as per the original rates but the changes in customer preference and other factors led to different decisions.
Ultra-High Temperature (UHT) Milk, Chena or paneer (pre-packaged and labelled), Pizza Bread, Khakhra, chapati or roti, Paratha, parotta and other Indian breads by any name called, Bidi wrapper leaves (tendu), Indian katha, Erasers and Maps, Exercise book, graph book and Notebooks, Pencils and Pencil Sharpeners, Millet Flour (if sold in other than pre-packaged and labelled form), Milk, Butter Milk, Curd, Cereals, Natural Honey, Flour, Besan, Puffed rice, Papad, Bread, Prasad, Salt, Bindi, Sindoor, Contraceptives, Fresh Fruits and Vegetables, Firewood, Bangles (non-precious metals), Agricultural Implements, Stamps, Judicial Papers, Printed Books, Newspapers, Bangles, Human Blood, Guar meal, Hop cone (other than grounded, powdered or in pellet form), Certain dried vegetables such as sweet potatoes, maniac, Unworked coconut shell, Khandsari sugar, de-oiled rice bran, hearing aid accessories, Fortified milk, Sanitary pads, Raw material used in brooms, Commemorative coins circulated by the RBI or government, Saal leaves, Deities made of stone, marbles or wood, Vegetables in the state of uncooked or cooked by steaming or boiling in water while being frozen, branded and are in a unit container, Vegetable briefly preserved under the mixtures of sulfur dioxide gas, in brine, in sulfur water or in other preservative solutions but unsuitable in that state for immediate consumption, Plates and cups made of flowers, leaves and bark, Dried Tamarind, etc.
0.25%
Semi-precious Stones-cut & Polished
1.50%
Diamond Job work, Diamond
Common Items
Popcorn with Salt and Spices, Molasses, Millet Flour (pre-packaged and labelled), Uncooked/Unfried Snacks, Pre-Packed Curd, Lassi, Buttermilk, Branded Paneer, Frozen Vegetables, Processed Spices
Pizza Bread, Rusk, Sabudana, Soyabean, Groundnut, Sunflower Seeds
Vegetable Fats & Oils, Beet Sugar, Cane Sugar, Cocoa Beans, Shells, Paste Bakery Mixes, Doughs Vermicelli Poha, Bran, Fried Gram, Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, Flour of potatoes in branded containers, Chutney powder, Tamarind kernel powder, Desiccated coconut
Household and Personal Care
Handbags and shopping bags of cotton and jute
Tooth powder
Candles
Hand bags and shopping bags of cotton and jute
Tableware and Kitchenware of wood
Umbrellas
Sewing needles
Kerosene burners, stoves and wood burning stoves of iron or steel
Brass Kerosene Pressure Stove
Bicycles and other cycles
Sewing machines
Parts and accessories of bicycles
Bamboo Furniture
Talcum and Face powder
Hair oil and Shampoo,
Dental floss, Toothpaste and Tooth brushes
Shaving Cream and Lotion
Toilet Soap