GST Reforms: What Gets Cheaper and Costlier from September 22; Check Full List

New GST Rates: The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman on September 3 ,2025, approved major changes to India’s indirect tax system. The new rates will take effect from September 22 and are expected to directly impact household budgets. Essentials across food, healthcare, and consumer goods will become cheaper, while sin goods and luxury products remain under tighter taxation.

The GST Council has approved significant reforms today. These reforms have a multi-sectoral and multi-thematic focus, aimed at ensuring ease of living for all citizens and ease of doing business for all: Office of Finance Minister Nirmala Sitharaman pic.twitter.com/7yg9zELOvs

— ANI (@ANI) September 3, 2025

What Gets Cheaper

The council exempted UHT milk, paneer, parathas, pizza bread, khakhra and roti from GST. Butter, ghee, cheese, jams, sauces, soups, pasta, namkeens and confectionery will now carry a 5 percent levy, reduced from 12 to 18 percent. Dry fruits such as almonds, pistachios and cashews, along with dates and citrus fruits, will also be taxed at 5 percent.

In healthcare, life-saving drugs including Agalsidase Beta, Onasemnogene, Daratumumab and Alectinib will now be tax-free. Most medicines, medical devices, diagnostic kits, bandages, thermometers and oxygen will attract 5 percent GST instead of 12 to 18 percent.

Personal care items like hair oil, shampoos, toothpaste, soaps, shaving products, talcum powder, toothbrushes, candles and safety matches will now cost less with a 5 percent GST. Stationery items such as notebooks, pencils, sharpeners and erasers, as well as toys, sports goods, handicrafts and bamboo or cane furniture, will also get cheaper.

In housing and transport, GST on cement has been cut from 28 percent to 18 percent. Tractors, bicycles, motorcycles below 350cc, small cars, electric and hybrid vehicles and ambulances will see lower levies. Marble, granite blocks and eco-friendly building materials like particle boards from crop residue will also be taxed at 5 percent.

What Gets Costlier 

The council increased GST on pan masala, gutkha, chewing tobacco and cigarettes to 40 percent, up from 28 percent. Carbonated soft drinks, caffeinated beverages and fruit-based fizzy drinks have also moved to the 40 percent bracket. Luxury items such as SUVs and large cars with bigger engines, motorcycles above 350cc, yachts, private aircraft and firearms including revolvers and pistols will now carry 40 percent GST.

Other hikes include coal, lignite and peat at 18 percent instead of 5 percent, and biodiesel not blended with diesel at 18 percent, up from 12 percent. Premium apparel and textiles priced above Rs 2,500 per piece and high-value cotton quilts will also fall in the 18 percent slab. Certain paper products including uncoated and kraft paper will now be taxed at 18 percent.

Watch Live: Smt @nsitharaman addresses the media on the outcomes of 56th GST Council Meeting in New Delhi. @PIB_India@FinMinIndia@GST_Councilhttps://t.co/saqmJf68Nu

— Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025