GST changes from September 22: What gets cheaper and what costs more in Mumbai

The revised Goods and Services Tax (GST) structure, announced earlier this month, will come into force across India from tomorrow. Under the new system, only two slabs will remain—5 per cent and 18 per cent. A special 40 per cent rate will apply only to products such as pan masala, cigarettes, sugary aerated drinks, and carbonated beverages.

In Mumbai, one of the country’s busiest consumer markets, traders and retailers are preparing for the shift. Goods and services in the city will now fall under these two rates, aimed at simplifying the tax system for businesses and consumers. However, the higher 40 per cent rate has been reserved for select items.

Also read | GST changes from September 22: What’s cheaper, costlier in Bengaluru, and why double-check MRPs

What May Get Cheaper Under GST 2.0

Everyday Essentials

Several household products currently taxed at 12% are expected to shift to the 5% slab. This includes:

Toothpaste, soaps, and shampoos

Packaged foods like biscuits, snacks, and juices

Dairy items such as ghee and condensed milk

Read | GST rate cut kicks in from Monday, goods and services to become cheaper

Bicycles and stationery

Apparel and footwear below a certain price point

Why it matters: Even small savings on daily-use items can add up, easing monthly expenses for middle-class households.

Household Appliances and Electronics

Items from the 28% bracket may now fall under the 18% slab, cutting prices by 7–8%. Products likely to benefit include:

Air conditioners

Refrigerators and dishwashers

Large-screen televisions

Cement, key for housing and construction

Why it matters: Lower prices make appliances and building materials more affordable for India’s expanding middle class.

Read | Amul cuts prices of over 700 items after GST reforms: From ghee and paneer to butter – Check what will get cheaper

Automobiles

The automobile sector is among the biggest gainers.

Small cars (engine size below 1,200cc) may see GST reduced from 28% to 18%

Two-wheelers could also move to a lower slab

Luxury cars and SUVs will continue to attract higher taxes

Why it matters: Lower taxes on small cars and two-wheelers could revive sales, benefiting auto majors like Maruti Suzuki, Hyundai, and Tata Motors.

Insurance and Financial Services

Insurance premiums, currently taxed at 18%, may be shifted to a lower slab or even exempted.

Why it matters: Affordable insurance can boost coverage among middle-income households, offering greater financial security.

What Will Remain Costly

The government has confirmed that some goods will continue to face higher taxation under the 40% “sin tax” slab. These include:

Tobacco, alcohol, and pan masala

Online betting and gaming platforms

Petroleum products (kept outside GST, so no fuel relief)

Luxury items such as diamonds and precious stones

Read | GST reform: Indian companies likely to witness up to 7% growth in revenues after new rates, says Crisil

What Will Remain Costly

The government has confirmed that some goods will continue to face higher taxation under the 40% “sin tax” slab. These include:

Tobacco, alcohol, and pan masala

Online betting and gaming platforms

Petroleum products (kept outside GST, so no fuel relief)

Luxury items such as diamonds and precious stones

Everyday Impact

For consumers, GST 2.0 means:

Cheaper shopping baskets – Essentials like soaps, snacks, and packaged food cost less.

Big-ticket savings – Cars, ACs, and TVs become more affordable.

Financial relief – Lower insurance premiums ease household budgets.