On Wednesday, September 3, 2025, the Goods and Services Tax Council gave the green light for rate reductions on various food items, consumer electronics, agricultural products, renewable energy, textiles, health, and more.

With this adjustment, the GST framework now consists of just two rates – 5% and 18% – a decrease from the previous four rates of 5%, 12%, 18%, and 28%.

In addition to these two rates, certain items like sin goods and luxury goods are taxed at a hefty 40%.

The revenue generated from these categories will help cover any tax revenue shortfalls for the States.

Some Essential Products Changes In Their Rates

Certain clothing and accessory items face a higher GST rate of 18%, up from 12%, while those below that threshold still enjoy a 5% tax rate.

On the cooking front, staples like butter and cheese are now taxed at 5%, a drop from the previous 12%.

Additionally, various types of Indian bread such as chapati, roti, paratha, and khakhra are no longer subject to GST, as the earlier 5% tax has been removed.

Personal use drugs and medicines are now cheaper, with a 5% tax replacing the earlier 12%. Moreover, 33 life-saving medications are now exempt from tax, which previously had a 12% rate.

As for the 40% tax bracket, items like yachts, caffeinated drinks, pan masala, smoking pipes.

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