GST rate cut today — From daily items getting cheaper to higher tax on sin goods, here's 10 key highlights

GST reforms: Prime Minister Narendra Modi in an address to the country yesterday, asserted that the goods and services tax (GST) reforms coming into effect today, on September 22, will “accelerate India's growth story”.

Highlighting it as a big stop towards “Aatmanirbhar Bharat”, Modi encouraged support for swadeshi goods, adding that it will strengthen India's economy similar to the way it powered the freedom movement.

“A ‘GST bachat utsav’ (savings festival) will begin tomorrow. You will be able to buy things you like more easily. The poor, middle class, neo middle class, youths, farmers, women, traders and shopkeepers will benefit from this,” he said.

GST reforms today: Top 10 highlights

• The GST Council announced the reforms earlier this month. Union Finance Minister Nirmala Sitharaman said the Council approved revision of GST slabs from four (5 per cent, 12 per cent, 18 per cent, and 28 per cent); to two (5 per cent and 18 per cent), plus a special rate of 40 per cent on select items and sin goods.
• As many as 375 items, including automobiles, electronics, equipment, kitchen staples and medicines, are set to get cheaper for you from today.
• Food items that will see reduced prices include beverages containing milk, coffee, condensed milk, biscuits, butter, cereals, corn flakes, drinking water packed in 20-litre bottles, dry fruits, fruit pulp or fruit juice, ghee, ice cream, jam and fruit jellies, ketchup, namkeen, paneer, pastry, sausages and meat, and tender coconut water, among others.
• Other daily items such as after-shave lotion, face cream, face powder, hair oil, shampoos, shaving cream, talcum powder, toothbrush, and toilet soap bars could see reduction in prices.
• In electronics, the items that will see price cuts include, airconditioners (ACs), diswashers, televisions (TVs), and washing machines.

• Cost of medicines will come down for the common man, GST for medical devices such as diagonistic kits and glucometers has been cut to 5 per cent, which could lead to price cuts as well. The government has already directed pharmacies to revise their MRP or sell medicines at a lower rate after taking into account GST cut benefits, according to a PTI report.
• In the beauty and physical well-being services, GST has been slashed for barbers, fitness centres, health clubs, salons, and yoga, which could be passed to the end customers.
• For homebuyers, GST on cement has been reduced from 28 per cent to 18 per cent, which is likely to lead in lower home prices.
• The biggest beneficiary has been the auto space, where effective tax including cess has been reduced from 35-50 per cent to flat 40 per cent.
• Notably, after the GST rate cut announcement, several consumer brands announced reduction in the prices of their goods, including Amul, HUL, L'Oréal and Himalaya. Auto brands also rushed to announced the “Diwali” rate reductions from September 22, 2025.

GST rejig: What becomes more expensive?

Soft drinks such as Coca-Cola and Pepsi, as well as other non-alcoholic beverages, will see price hikes as the GST Council approved to raise the tax rate on carbonated drinks from 28 per cent to 40 per cent, PTI reported.

Other non-alcoholic beverages will see a price increase because the GST on these items has been raised from 18 per cent to 40 per cent.

The Council also raised the rate on all goods, including aerated waters, containing added sugar or other sweetening matter or flavoured to 40 per cent from 28 per cent.

A 40 per cent GST rate will be imposed on all petrol and diesel vehicles exceeding 1,200 cc and 1,500 cc, respectively, as well as those longer than 4,000 mm. It includes motorcycles above 350 cc, yachts, aircraft for personal use, station wagons, racing cars, and smoking pipes.

Additionally, ‘sin’ goods such as bidis, cigarettes, pan masala, tobacco and tobacco products, will also be taxed at a 40 per cent GST rate.

(With inputs from Agencies)