New GST Rates List 2025: Full List Of Items With Revised Rates Effective From Navratri, September 22

India’s biggest GST reform since 2017 is here. A new two-slab tax structure will change how families shop, build homes, buy vehicles, and pay for education and healthcare from Navratri 2025

Consider stepping into a shop on Navratri morning and finding daily goods, school books and even medicines cheaper than last week. 

Many families will face this from 22 September 2025, when the new GST rates take effect. The GST Council's latest decision has simplified the entire indirect tax system.

Big Change In India’s Tax: What Happened And When?

The GST Council in September 2025 announced sweeping changes to indirect taxes. This reform moves away from the old four-slab design and introduces two main GST slabs of 5 percent and 18 percent. In addition, a 40 percent slab has been fixed for luxury and sin goods such as cigarettes, alcohol and high-end items.

The new rates become effective from 22 September 2025, the start of Navratri. According to official numbers, India collected ₹22.08 lakh crore in gross GST revenue in the financial year 2024–25. The average monthly collection touched ₹2.04 lakh crore. Compliance has steadily improved since the launch of GST in 2017, and this reform is seen as the next phase of simplification.

Household Goods And Food Items

Families will feel the change first in their kitchens and bathrooms. Items used daily such as soaps, toothpaste, shampoos, bicycles and tableware, have been shifted to the 5 percent GST slab.

Food products, including UHT milk, paneer and chapat,i have been made tax-free. Popular packaged snacks like bhujia, sauces and chocolates are now at 5 percent.

This adjustment aims to bring down monthly household budgets and encourage more formalisation in the packaged food industry.

Comparison of GST rates for daily essentials shows the relief in clear numbers.
 

These cuts mean common households will save on everyday products while food companies see better compliance in the supply chain.

Housing Materials And Construction

The construction sector, which was burdened with high taxes, has received relief. Cement, which was taxed at 28 percent, now falls under 18 percent. Bricks, marble, granite blocks and bamboo flooring have been moved to the 5 percent slab.

Builders and contractors expect reduced costs for housing projects, especially in tier-2 and tier-3 cities. This step may give fresh energy to affordable housing schemes.

The table below explains the tax cuts on construction items.
 

Lower tax on cement and bricks may help reduce home prices, making housing more accessible for middle-income families.

Vehicles, Farm Tools And Machines

Transport and agriculture have been central in this reform. Small cars and two-wheelers up to 350cc that earlier carried 28 percent GST are now placed at 18 percent. Trucks, buses and auto parts also shift to 18 percent.

For rural India, the bigger relief comes from tractors, harvesters, irrigation pumps and poultry machinery. These now attract only 5 percent GST instead of 12 percent.

Here is the snapshot of rate cuts on vehicles and machines.
 

This shift is expected to boost rural demand, while also making small cars and two-wheelers more affordable for urban families.

Health, Medicines And Education

Healthcare is one of the biggest winners. Life-saving drugs and diagnostic kits now attract zero GST. Ayurveda, Unani and other traditional medicines come under the 5 percent slab. Medical equipment like thermometers, oxygen supplies and spectacles are also placed at 5 percent.

Education items such as exercise books, crayons, sharpeners, erasers, charts and maps are tax-free. This is expected to reduce school expenses for families.

Below is the rate cut comparison for medicines and education products.
 

This means families may see clear savings on school bills and medical expenses from September 2025.

Hotels, Restaurants And Services

Apart from goods, services have also been revised. Hotel rooms priced up to ₹7,500 per night now attract 5 percent GST. Restaurant meals also come under the 5 percent rate. Air tickets in the economy class are taxed at 5 percent, while business class is at 12 percent.

Beauty services including salons, gyms, barbers and yoga classes now attract 5 percent GST compared to 18 percent earlier. This is expected to improve compliance in a sector where unregistered businesses were common.

Why A Two-Slab Structure Matters?

Theoretical coverage of GST explains why fewer slabs reduce disputes. In simple terms, a theoretical coverage is the idea that a tax structure should be easy to apply across sectors without creating confusion. In the earlier system, different slabs for similar products led to frequent litigation.

For example, snacks like namkeen and biscuits often faced different rates, leading to long disputes. The two-slab structure of 5 percent and 18 percent is simpler to apply and reduces the inverted duty problem where input costs carried higher tax than finished products.

How This News Links To Past Coverage

LoansJagat published a detailed piece highlighting rising calls from industries for GST simplification to cut compliance costs and boost investments. The article Has GST Been Reduced On Essential Items? What’s Cheaper, What’s Costlier? See Full List Here focused on how tax relief on health insurance, school supplies, vehicles, electronics, and agricultural gear could aid families, farmers, and auto buyers.

The September 2025 GST Council reform directly addresses those concerns. By restructuring slabs and extending zero-rating and reduced rates across a broad set of goods and services, the latest changes bring the simplicity previously advocated by LoansJagat into reality.

Conclusion

The new GST rates from 22 September 2025 mark a turning point in India’s tax system. Families will see changes in the price of food, medicines, education supplies and travel. Builders expect cheaper costs for housing projects. Farmers and small businesses stand to benefit from lower taxes on machines.

This reform goes beyond piecemeal cuts of earlier years. By moving to a two-slab structure, the government has tried to make GST cleaner and easier. As Navratri begins, households will measure how much relief these cuts bring to their budgets, while industries will prepare for a new phase of tax compliance.
 

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