Sept 22,2025: The goods and services tax (GST) rate rationalisation announced by the GST Council earlier this month will come into effect today, on September 22, 2025.
Union Finance Minister Nirmala Sitharaman said the Council approved revision of GST slabs from four (5 per cent, 12 per cent, 18 per cent, and 28 per cent); to two (5 per cent and 18 per cent), plus a special rate of 40 per cent on select items and sin goods.
‘Relief for middle-class’: Nirmala Sitharaman
Termed as a “Diwali gift” to consumers, Sitharaman said the aim of the new reforms is to bring relief to the middle class. “In common man and middle class items, there is a complete reduction,” she stated.
“This reform is not just about rationalising rates. It’s also on structural reforms. It’s also about ease of living, so that businesses can conduct their operations with the GST with great ease. We’ve reduced the slabs. There shall be only two slabs, and we are also addressing the issues of compensation cess,” the finance minister added.
GST rate: What items get cheaper?
As many as 375 items, including automobiles, electronics, equipment, kitchen staples and medicines, are set to get cheaper for you from today.
Food items that will see reduced prices include beverages containing milk, coffee, condensed milk, biscuits, butter, cereals, corn flakes, drinking water packed in 20-litre bottles, dry fruits, fruit pulp or fruit juice, ghee, ice cream, jam and fruit jellies, ketchup, namkeen, paneer, pastry, sausages and meat, and tender coconut water, among others.
Other daily items such as after-shave lotion, face cream, face powder, hair oil, shampoos, shaving cream, talcum powder, toothbrush, and toilet soap bars could see reduction in prices.
In electronics, the items that will see price cuts include, airconditioners (ACs), diswashers, televisions (TVs), and washing machines.
Cost of medicines will come down for the common man, GST for medical devices such as diagonistic kits and glucometers has been cut to 5 per cent, which could lead to price cuts as well. The government has already directed pharmacies to revise their MRP or sell medicines at a lower rate after taking into account GST cut benefits, according to a PTI report.
In the beauty and physical well-being services, GST has been slashed for barbers, fitness centres, health clubs, salons, and yoga, which could be passed to the end customers.
For homebuyers, GST on cement has been reduced from 28 per cent to 18 per cent, which is likely to lead in lower home prices.
The biggest beneficiary has been the auto space, where effective tax including cess has been reduced from 35-50 per cent to flat 40 per cent.
Notably, after the GST rate cut announcement, several consumer brands announced reduction in the prices of their goods, including Amul, HUL, L’Oréal and Himalaya. Auto brands also rushed to announced the “Diwali” rate reductions from September 22, 2025.
