We all often think that there should be some relief in the festive season, prices should be reduced and the burden on the pocket should be light. At such a time, the government has taken a big decision. Now from 22 September 2025, new GST rates are going to be implemented across the country. That is, whether old goods kept in the shops or new, billing on everything will be done according to the new rates. This change will affect both the pockets of the people and the thinking of the traders.
The 56th meeting of the GST Council was held on Wednesday at Sushma Swaraj Bhavan in Delhi, which started at 11 am and lasted till 9 pm. In this mega meeting which lasted for about 10 hours, historic changes were made in the tax structure. The Council agreed to completely abolish the slabs of 12% and 28% and now keep only two main slabs 5% and 18%. Finance Minister Nirmala Sitharaman has officially announced the decisions by holding a press conference. You can see New GST Rates List 2025 here.
New GST Rates In 2025
Relief To Electronics And Automobiles
90% of the items in the 28% slab will now fall under the 18% bracket. This includes air conditioners, TVs larger than 32 inches, all TVs, dishwashing machines, small cars (less than 1200cc in petrol and 1500cc in diesel, up to 4 metres in length), and motorcycles up to 350cc. This will benefit companies like Maruti Suzuki, Toyota, Suzuki, and Hero MotoCorp. While a new slab of 40% will apply to large cars (more than 4 metres), the removal of the additional cess will keep the total tax around 50%.
Boost To Agriculture and Health Sector
Keeping farmers in mind, GST on fertilizers, agricultural machinery, and tractor parts has been reduced from 12-18% to 5%. Relief has also been given in the health sector, in which GST on health and life insurance is being considered to be reduced from 18% to 5% or zero. Tax on textile sector, especially shoes and clothes costing less than Rs 1,000, has also been reduced from 12% to 5%.
40 Percent Tax On These Things
In the GST Council meeting, a consensus has been reached on imposing 40 percent tax on tobacco products. 40 percent tax will be levied on super luxury goods, pan masala, cigarettes, gutkha, chewing tobacco, zarda, added sugar, carbonated drinks, aircraft for personal use, luxury cars and fast food.
Economic Impact And Challenges
The Finance Minister said that this reform is part of 'GST 2.0', which will promote self-reliant India. Experts estimate that the tax cut may lead to a revenue loss of 0.2-0.4% GDP to the government, but it will be compensated by increasing consumption. According to Nomura Research, this reform can bring an increase of 0.6-0.8% in GDP. However, some states like Punjab, Kerala have raised concerns about revenue loss.
When Will The New Rates Be Implemented?
Finance Minister Nirmala Sitharaman recently announced major reforms in the GST Council meeting. Now there will be only two slabs, 5% and 18%. At the same time, 40% tax will be levied on luxury and sin products. This decision will come into effect on September 22, just before Navratri. That is, from this day, new rates will also be applicable on old stock like TV, fridge, cooler.
Conclusion
This decision is considered important for both businessmen and the general public. Simplifying the tax structure was a long-standing demand, and now the GST Council has taken a big step by removing the 12% and 28% slabs. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
