New GST Rates 2025: Kitchen Staples, Electronics, and Cars Become More Affordable
India's Goods and Services Tax (GST) underwent a significant overhaul on September 22, 2025, introducing a simplified two-tier structure: 5% and 18%, with a special 40% rate for luxury and sin goods. This reform aims to reduce the tax burden on essential items and stimulate economic growth.
Key Highlights of the GST 2.0 Reform
1. Kitchen Staples and Daily Essentials
The new GST rates have led to a reduction in prices for various kitchen staples:
Dairy Products: Items like ghee, butter, and paneer have seen price cuts. For instance, ghee prices have decreased by ₹40–70 per litre, bringing the cost of a 1-litre pack down to ₹610–750. Hindustan Times
Packaged Foods: Namkeen, bhujia, instant noodles, chocolates, jams, ketchup, and sauces have become more affordable as they move to the 5% GST bracket. Hindustan Times
2. Consumer Electronics
Electronics have also become more budget-friendly:
Air Conditioners and Dishwashers: Previously taxed at 28%, these items now fall under the 18% GST slab, potentially reducing prices by ₹3,600 to ₹42,390. mint
Televisions and Washing Machines: Price reductions range from ₹2,500 to ₹85,000, depending on the model and brand. mint
3. Automobiles
The automobile sector has witnessed notable changes:
Small Cars and Two-Wheelers: GST has been reduced from 28% to 18%, making these vehicles more affordable. Indiatimes
Luxury Cars: While still taxed at 40%, the removal of the additional cess has led to a decrease in overall prices. Indiatimes
4. Medicines and Medical Equipment
The GST on life-saving drugs and medical equipment has been reduced or exempted, making healthcare more accessible. mint
5. Insurance
Life and health insurance premiums are now exempt from GST, reducing the financial burden on policyholders. mint
FAQ: Understanding the New GST Rates
Q1: What are the new GST slabs introduced in 2025?
The GST Council has introduced two primary slabs: 5% for essential goods and services, and 18% for general goods and services. A special 40% rate applies to luxury and sin goods
.
Q2: Which items have become cheaper under the new GST rates?
Items such as dairy products, packaged foods, electronics, automobiles, medicines, and insurance premiums have seen price reductions.
Q3: Are there any items that have become more expensive?
Luxury cars, soft drinks, and tobacco products are now subject to higher GST rates.
Q4: How will these changes impact consumers?
Consumers can expect lower prices on everyday essentials, electronics, and vehicles, leading to increased disposable income and enhanced purchasing power.
Q5: What is the government's objective behind these reforms?
The primary goal is to simplify the tax structure, reduce inflation, and stimulate economic growth by making essential goods more affordable.
Published on : 22th September
Published by : aswini
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