INDIA GST REFOM 2025
Next-Gen GST Reform: Products with Reduced Tax Rates
India’s latest Next-Gen GST Reform has simplified tax slabs and reduced GST on a wide range of products. Below is a detailed breakdown of items that have become cheaper under the new regime.
1. Essential Daily-use Products (Now 5% GST)
The following items, previously taxed at 18%, have seen a reduction to just 5% GST:
- Hair oil, shampoo, toothpaste, soap, shaving cream, toothbrushes
- Feeding bottles, baby napkins, clinical diapers
- Utensils, tableware, kitchenware
These cuts aim to reduce household expenses on everyday essentials. :contentReference[oaicite:0]{index=0}
2. Staples & Dairy Products (5% or Tax-free)
- UHT milk (tax-free), paneer, roti, chapati, paratha (tax-free)
- Butter, ghee, cheese, dairy spreads (moved to 5%)
- Namkeens, bhujia, mixtures (5%), noodles, pasta, cornflakes, chocolates, confectionery, jam, sauces, sugar, cooking oils
Many staple and dairy items now enjoy lower or zero tax to make everyday food more affordable. :contentReference[oaicite:1]{index=1}
3. Healthcare & Educational Items (5% or Nil)
- Individual life & health insurance policies: GST abolished
- Life-saving medicines and select drugs: tax-free
- Thermometers, medical-grade oxygen, diagnostic kits, glucometers, test strips, corrective spectacles: 5%
- Maps, globes, pencils, crayons, exercise books, notebooks, erasers: Nil
Prioritizes welfare by lowering costs of health care and education-related supplies. :contentReference[oaicite:2]{index=2}
4. Appliances & Electronics (Now 18% GST)
- Air conditioners, TVs over 32 inches, dishwashers, refrigerators, washing machines, monitors, projectors
These items moved from the 28% slab to 18% — expected to provide festive-season relief. :contentReference[oaicite:3]{index=3}
5. Automobiles, Vehicles & Auto-parts (Now 18%)
- Small petrol cars (<1200 cc), diesel cars (<1500 cc), hybrids, three-wheelers, motorcycles ≤350 cc
- Buses, trucks, ambulances, auto parts (uniform 18%)
The move offers relief to middle-income households and improves affordability of vehicles. :contentReference[oaicite:4]{index=4}
6. Agriculture & Farming Equipment (Now 5%)
- Tractors, tractor tyres & parts, agricultural/horticultural/forestry machines
- Drip irrigation systems, sprinklers, bio-pesticides: all moved to 5%
This supports farmers by lowering input costs for essential machinery. :contentReference[oaicite:5]{index=5}
7. Summary Table
| Category | Examples of Products | New GST Rate |
|---|---|---|
| Daily Essentials | Shampoo, soap, toothbrushes | 5% |
| Staples & Dairy | Paratha, butter, chocolates | 5% / Nil |
| Healthcare & Education | Insurance, spectacles, school supplies | 5% / Nil |
| Appliances & Electronics | TVs, ACs, dishwashers | 18% |
| Automobiles & Parts | Small cars, parts, 3-wheelers | 18% |
| Agricultural Equipment | Tractors, drip systems | 5% |
8. FAQs
Q: When do these reduced GST rates take effect?
These changes are effective from September 22, 2025, coinciding with the Navratri festival. :contentReference[oaicite:6]{index=6}
Q: Which daily items are now cheaper?
Personal care (shampoo, soap), staples like paneer and parathas, baby products, utensils, and healthcare tools now attract lower GST. :contentReference[oaicite:7]{index=7}
Q: Are automobiles really cheaper now?
Yes. Small petrol/diesel cars, motorcycles, three-wheelers, buses, and auto parts now fall under the 18% slab—much lower than their previous 28% rate. :contentReference[oaicite:8]{index=8}
Q: What’s the advantage of reducing GST on insurance & healthcare?
Exempting GST on health & life insurance and lowering it on medical items lowers out-of-pocket expenses, protecting the middle class and vulnerable groups. :contentReference[oaicite:9]{index=9}
Q: Will GST rates return to normal after festivals?
No — these have been formalized as part of the permanent GST structure moving to two slabs (5% & 18%), with a luxury/sin slab at 40%. :contentReference[oaicite:10]{index=10}