21/09/2025
The new GST slab rates in India will take effect from September 22, 2025. This significant reform simplifies the GST system into a two-slab structure, with the majority of goods and services falling under 5% or 18% tax rates, and a special 40% rate for luxury and sin goods.
Key changes in the new GST structure:
Simplified Slabs: The previous structure of multiple slabs (5%, 12%, 18%, 28%) has been replaced by a streamlined two-tier system.
5% Slab: Applied to essentials and daily-use goods, including many food items, medicines, and clothing.
18% Slab: Applicable to most other goods and services, such as electronics, restaurant services, and telecom services.
40% Slab: Introduced specifically for ultra-luxury and sin goods, replacing the earlier highest slab.
Items Becoming Cheaper: Many mass-consumption items and aspirational goods like ghee, packaged food, electronics (TVs, washing machines), and even automobiles will become cheaper as they move to lower tax brackets.
Benefits: The reform aims to reduce complexity, enhance ease of doing business, and stimulate demand by making goods more affordable for consumers.
