The GST council finally rolled out the new structure. They call it GST 2.0. And yes, things are changing. Some items are now cheaper. Some are still expensive. A few got pushed into the new 40% slab. But for the average consumer, the bigger news is that daily essentials, medicines, electronics, even hotel stays are coming down in price.
Earlier GST had four main slabs. 5, 12, 18 and 28 percent. That’s gone now. The 12 and 28 percent slabs are scrapped. Most items now fall under 5 or 18 percent. Luxury and sin goods got pushed to the new 40 percent. And a handful of essentials moved to 0. That’s nil GST. Which means zero tax.
Food and Household
Everyday food items got relief. Packaged snacks like chips, biscuits, sauces, noodles dropped from 12 to 5 percent. Some staples like bread, roti, paneer, milk in packets shifted to nil GST. That means the next time you buy them the bill should be lighter.
Dairy also saw cuts. Butter, cheese, ghee, ice-cream, earlier taxed at 12, now just 5. Companies like Amul already announced price cuts on hundreds of products. Household essentials like soaps, shampoos, toothpaste, even hair oil now taxed at 5 percent. That’s a big shift from the earlier 18.
Healthcare and Medicines
This is one of the strongest changes. Around 36 lifesaving drugs including cancer and rare disease medicines now at nil GST. That means no tax at all. Other medicines, diagnostic kits, surgical equipment moved to 5 percent. For families struggling with medical costs this change is significant. Hospitals and clinics too will benefit since input costs fall.
Baby and Personal Care
Baby diapers, feeding bottles, wipes. Earlier taxed higher. Now at 5 percent. Personal care like sanitary pads, soaps, shampoos, toothbrush, all brought down to 5. The council wanted to ease pressure on families and these products got priority.
Electronics and Appliances
Big relief here too. Earlier TVs, washing machines, refrigerators, ACs, dishwashers were stuck in the 28 percent slab. Now they sit at 18. This means big-ticket items will finally cost less. Not overnight, because retailers take time to adjust, but gradually you should see revised price tags.
Automobiles and Two Wheelers
This one is mixed. Small cars, scooters, two-wheelers under 350cc, moved from 28 to 18 percent. So entry level vehicles will be cheaper. But luxury cars, SUVs, high capacity bikes pushed to the new 40 percent bracket. Those will get expensive. So middle class buyers gain, high-end buyers pay more.
Cement and Construction
Cement was at 28 percent. Builders complained for years. Finally it has been cut to 18. This should bring some relief to housing and infra costs. Though whether builders pass it on to buyers is another story.
Hotels and Services
Hotels charging less than ₹7,500 a night now at 5 percent GST. Earlier was 12. Salons, gyms, yoga centers, barber services also down from 18 to 5. That means wellness and personal services get cheaper. Good news for small business owners in this space.
Stationery and Education
Students and parents will like this. Notebooks, pencils, erasers, maps, charts moved to nil GST. Zero tax. Which means school supplies cheaper. It’s a small but welcome change.
Luxury and Sin Goods
Not everything is cheaper. Tobacco, pan masala, sugary soft drinks, luxury cars now sit in the new 40 percent slab. These items are considered harmful or luxury so the government has no intention to cut rates here. If anything, they got costlier.
🏷️ Key Product Categories & Their Changes
Here’s what kinds of products are cheaper now, and how their GST rates have changed:
| Product / Category | Previous GST Rate | New Rate | Notes / Examples |
|---|---|---|---|
| Food & Kitchen Staples / FMCG | 12%, 18% | 5% or 0% | Packaged foods (namkeen, chips, instant noodles), jams, sauces, bakery goods now 5% Some staples like roti, paratha, bread, pre-packaged paneer, UHT milk moved to 0% (nil) rate |
| Dairy Products / Butter / Ghee / Cheese / Frozen / Ice-cream | 12% | 5% | Amul reduced prices on 700+ products including butter, cheese etc. Ghee, butter, paneer also listed in the rate cut list. |
| Personal Care, Grooming, Hygiene / Toiletries | 12%, 18% | 5% | Hair oils, shampoo, soaps, toothpaste, toothbrushes etc. |
| Baby / Child Care Products | 12%, 18% | 5% | Feeding bottles, baby diapers, napkins, clinical necessities etc. |
| Healthcare / Medicines / Lifesaving Drugs | 12% | 5% or 0% | 36 “lifesaving” medicines moved to 0% (nil tax) Other medical goods, diagnostic kits, surgical supplies etc now taxed at 5% |
| Electronics / Appliances / Home Goods | 28% | 18% | TVs, ACs, dishwashers, refrigerators, washing machines now taxed at 18% |
| Automobiles / Two-wheelers / Parts | 28% (plus cess etc) | 18% or 40% | Small cars, vehicles ≤ 4 meters, ≤ certain cc, scooters, two-wheelers up to 350cc → 18% Luxury / high-end / high cc vehicles fall in 40% slab |
| Cement / Construction Materials | 28% | 18% | Cement and related building materials now taxed 18% |
| Hotels / Hospitality, Rooms ≤ ₹7,500 | 12% | 5% | Hotel rooms in lower tariff category now taxed at 5% |
| Services like Salons / Gyms / Wellness / Yoga / Barber / Spa | 18% | 5% | Salon, barber, gym, yoga services now taxed at 5% |
| Stationery / Educational Supplies / Books | 12% | 0% | Pencils, notebooks, exercise books, charts, maps, erasers moved to nil (0%) rate |
| Luxury / “Sin” Goods / Soft Drinks / Tobacco / Pan Masala etc. | 28% + cess / higher slabs | 40% slab | Tobacco, pan masala, sugary / aerated drinks, luxury cars etc now taxed 40% |
Final Thoughts
GST 2.0 is a mixed bag. Essentials, health, food, electronics, small vehicles got cheaper. Luxury, sin goods got more expensive. For consumers it means relief in everyday spending. For businesses it means adjusting systems and pricing to match new slabs.
The big idea is simple. Cut rates where it helps common people and push luxury higher. Whether prices in shops actually drop depends on how fast companies pass the benefit. But overall GST 2.0 looks like a step that will boost consumption.
Q&A
❓ What are the GST changes in 2025?
👉 In 2025, the GST Council reduced tax rates on essentials like food items, medicines, small electronics, and hotel services. Luxury goods still remain in the higher tax slab.
❓ What is the GST rate in 2025?
👉 The GST rate structure in 2025 continues under five slabs – 0%, 5%, 12%, 18%, and 28%. Essentials are mostly in the 0–5% range, while luxury and sin goods attract higher rates.
❓ Is there no GST in 2025?
👉 GST has not been removed in 2025. It is still India’s main indirect tax system. Only some essential goods and education-related services fall under the 0% GST category.
