GST Rate Cut 2025 – What Gets Cheaper and What Gets Costlier

The 56th GST Council Meeting (Sept 2025) has brought one of the biggest tax reforms since GST was introduced in India. From milk, paneer, butter, medicines, and essential goods getting cheaper to cars, luxury items, coal, and tobacco becoming costlier, this meeting marks a historic GST rate restructuring.

Here’s the complete list of old vs new GST rates (2025) with highlights on what’s cheaper and what’s more expensive for the common man, businesses, and industries.

The focus is on:

• Relief to common man (major cuts on food, dairy, medicines, essentials)

• Support to middle class (reduction on consumer goods, footwear, vehicles, electronics)

• Revenue alignment (higher GST on luxury, sin goods & vehicles)

• Ease of trade (faster refunds, GST Appellate Tribunal operational by Dec 2025)

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📊 Major GST Rate Changes

🥛 Food & Daily Essentials

• Milk (UHT): 5% → Nil

• Paneer (pre-packaged): 5% → Nil

• Butter, Ghee, Cheese: 12% → 5%
  

• Condensed milk: 12% → 5%

• Pizza bread, Roti, Khakhra, Chapati: 5% → Nil

• Paratha, Parotta & other Indian breads: 18% → Nil

• Dates, dry fruits, nuts (almonds, pistachios, cashews, etc.): 12% → 5%

• Fruit juices, jams, sauces, namkeens, ice cream, chocolates, confectionery: 12–18% → 5%

• Tender coconut water (packaged): 12% → 5%

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💊 Medicines & Healthcare

• Life-saving drugs (Daratumumab, Alectinib, Risdiplam, etc.): 12% → Nil

• General drugs & medicaments (Ayurvedic, Homoeopathic, Allopathic): 12% → 5%

• Medical oxygen: 12% → 5%

• Surgical items (gauze, bandages, catgut, diagnostic kits, glucometers, thermometers): 12–18% → 5%

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👕 Lifestyle & Personal Care

• Toilet soap, shampoo, toothpaste, hair oil, shaving cream: 18% → 5%

• Talcum/face powder: 18% → 5%

• Footwear (up to ₹2500): 12% → 5%

• Apparel > ₹2500: 12% → 18% (increased)

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🚗 Automobiles

• Small cars (Petrol <1200cc, Diesel <1500cc, length <4m): 28% → 18%

• Electric vehicles, tractors, three-wheelers, bicycles: 12–28% → 5–18%

• Luxury cars, SUVs, >1500cc hybrids: 28% → 40% (increased)

• Motorcycles >350cc, yachts, aircraft for personal use: 28% → 40%

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⛽ Fuel & Raw Materials

• Coal, lignite, peat: 5% → 18% (increased)

• Cement: 28% → 18%

• Steel, copper, aluminium utensils: 12% → 5%

• Paper, matches, handicrafts, eco-friendly boards: 12% → 5%

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🍹 Beverages & Tobacco (Sin Goods – Higher Tax)

• Aerated waters, fruit drinks, caffeinated drinks: 28% → 40%

• Pan masala, gutkha, tobacco products: 28% → 40% (except bidis – reduced to 18%)

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📺 Electronics & Appliances

• Television, AC, refrigerator, washing machines: 28% → 18%

• Solar water heaters, biogas plants, renewable energy devices: 12% → 5%

• Lithium batteries remain at 28%

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✅ Implementation:

• From 22 Sept 2025 for most goods & services.

• Pan masala, gutkha, tobacco: existing rates until cess loan repayment is completed.