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New GST Rates 2025: Essentials Cheaper, Luxury Goods Costlier – Complete List

Introduction

The Indian government has introduced GST Reform 2.0, the biggest update since 2017. The new system simplifies GST rates in India and makes daily essentials cheaper, while keeping luxury and “sin” goods costlier. This change aims to boost demand, reduce household expenses, and strengthen MSMEs. Let’s break down the new GST rate list 2025 and see how it impacts consumers and businesses.

Simplified GST Slabs

Earlier, Indian GST rates had four slabs: 5%, 12%, 18%, and 28%. Under GST Reform 2.0, the structure is simplified:

  • 5% slab – for essentials like food, textiles, and farming goods.
  • 18% slab – for most consumer products and services.
  • 40% slab – for luxury and sin goods like SUVs, tobacco, and sugary drinks.

    This makes it easier to understand how much is GST tax in India and brings transparency in the GST percentage in India.

New GST Rates 2025

CategoryGST RateItems Covered
Essential Food Items0% – 5%Roti, chapati, paratha, bread, paneer, chhena, milk, dairy products, basic snacks
Dry Fruits & Spices5%Almonds, cashews, raisins, masala powders, cooking ingredients
Healthcare & Medicines0% – 5%Life-saving drugs, basic medicines, medical devices, hospital essentials
Insurance0%Health insurance premiums, life insurance premiums
Agriculture & MSME Inputs5%Tractors, fertilizers, farm machinery, yarn, fabrics
Lifestyle & Household Items5% – 18%Soaps, shampoos, toothpaste, detergents, utensils, furniture
Electronics & Appliances18%TVs, ACs, monitors, dishwashers, refrigerators, washing machines
Small & Mid-size Automobiles18%Small cars, scooters, motorcycles, cars up to ₹14 lakh (mid-segment)
High-end Cars & SUVs40%Luxury cars, SUVs, imported vehicles
Industrial Goods5% – 18%Cement, coal, power backup (inverters 18%), solar products (5%)
Beverages (Sugary)40%Soft drinks, sweetened beverages, energy drinks
Sin Goods40%Tobacco, pan masala, gutkha, cigarettes