About Gst

The Goods and Services Tax (GST) is an indirect tax introduced in India on 1 July 2017, replacing a range of pre-existing taxes like VAT, service tax, central excise duty, entertainment tax, and octroi. GST unified the country's tax structure, simplifying the taxation of goods and services and eliminating the need for multiple taxes previously levied by both central and state governments.

New Gst Slabe

The Goods and Services Tax (GST) in India has undergone its biggest overhaul since its 2017 launch. In the 56th GST Council meeting, the government approved a simplified structure (now implemented), reducing the old multi-tier system (0%, 5%, 12%, 18%, and 28%) to just two main slabs—5% and 18%—plus a 40% “sin & luxury” slab for select items.

This reform has come in effect from September 22, 2025, aiming to reduce household costs, boost consumption, and simplify compliance for businesses.

What has changed post GST 2.0?

Essentials & FMCG (Nil or 5%)

• Pre-packaged paneer, UHT milk, rotis, paranthas
• Life-saving medicines (33 existing + 3 new cancer/rare disease drugs)
• Individual life and health insurance policies

5% GST (Earlier 12%/18%)

• Butter, ghee, cheese, condensed milk
• Bhujia, namkeen, potato chips
• Packaged juices, ketchup, jam, mayonnaise
• Pasta, noodles, corn flakes, confectionery
• Shampoos, soaps, toothpaste, toothbrushes
• Bicycles, kitchen utensils, tableware
• Agricultural machinery & bio-pesticides
• Medical devices (thermometers, glucometers, oxygen, spectacles)

Impact: Daily groceries, personal care, and household essentials get significantly cheaper.

Consumer Durables & Automobiles (18%)

• Air conditioners, televisions, refrigerators
• Small cars (≤1200cc petrol/≤1500cc diesel)
• Entry-level bikes (≤350cc)
• Cement, auto parts, buses, trucks, ambulances
• Apparel above ₹2,500

Impact: Big-ticket purchases now fall under the 18% slab, down from 28%, making upgrades more affordable

Luxury & Demerit Goods (40%)

• Mid-size and luxury cars (above small car category)
• Tobacco products, gutkha, pan masala, cigarettes (rates maintained under new 40% slab)

Impact: Premium items remain costly, ensuring higher taxation on non-essentials and demerit goods.