Key changes in the structure of GST

The Government has reduced GST on several items across different categories.  The new tax structure has two major slabs now 5 percent and 18 percent, and a whopping 40 percent for sin goods. These decisions were taken at the 56th Meeting of the GST Council, chaired by the  Union Finance Minister Nirmala Sitharaman on 3 September 2025. The GST rate rationalisation will be implemented from September 22.

Highlights:

♦ The GST Council endorsed a transition from the existing four-tier GST framework (5, 12, 18 and 28 per cent) to a simplified two-rate structure of 5 and 18 percent.  

♦ A special 40 percent slab is, however, proposed for a select few items such as high-end cars, tobacco and cigarettes. 

♦ Items such as hair oil, toilet, soap bars, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware and other household articles are now at 5%.

♦ Essential food items will remain tax-free, whilst various everyday food products and beverages will likely see reduced rates from 18 percent to 5 percent.

♦ This includes butter, ghee, dry nuts, condensed milk, sausages, meat, sugar boiled confectionery, jam, fruit jellies, tender coconut water, namkeen, 20-litre packaged drinking water, fruit pulp, juice, milk-based beverages, ice cream, pastry, biscuits, corn flakes, cereals and sugar confectionery.

New GST rates..

Economy