GST Rates: From Bread, Milk to AC; Know What Became Cheaper and Costlier. 10 POINTS
In the latest GST Council Meeting, several significant GST rates related decesions were taken. The central government after giving relief in the income tax, has fulfilled the promise of PM Modi. Now by changing the rates of GST, Hundreds of items used by the common man, farmers and small entrepreneurs have been made cheaper.
Now there will be only two rates of GST, 5 and 18 percent. With this change in GST rates, everything from bread, paratha and milk to AC and car will become cheaper. The 18 percent GST on health insurance and life insurance, which was pending for the last one year, has been completely abolished.
Under the new rates, small cars, three-wheelers and bikes with less than 350 cc capacity will now attract 18 percent GST instead of 28 percent. Tractors and their tyres will attract five percent tax. A new slab of 40 percent has been created for luxury cars of 1500 cc or longer than four meters, harmful items like tobacco and cigarettes and high luxury items.
The new rates on other products except paan masala, gutkha, cigarettes, chewing tobacco products like zarda and bidi will be applicable from 22 September i.e. the first day of Navratri. The rates of many services have also been changed, due to which staying in hotels will also become cheaper. It is estimated that due to such a big relief in GST rates, the government's GST revenue will decrease by Rs 47,700 crore annually.
Here we have listed 10 points to answer all your queries related to new GST rates.
The new GST rates will be effective from September 22, 2025 on most goods and services.
The new rates on cigarettes and certain tobacco products will be applicable on a later notified date.
A concessional GST rate of 5% is applicable on all medicines and drugs, except those medicines (Medicine GST) on which zero rate is applicable. This has been done to prevent manufacturers from increasing production costs. Zero percent GST will be levied on cancer medicines (Cancer Medicine New GST Rate).
Health clubs, salons, barbers, fitness centres and yoga services will now attract GST rate of 5% without input tax credit (ITC), up from 18% earlier.
The GST rate on all small cars (Small Car New GST Rate) has been reduced from 28% to 18%. This will apply to petrol, LPG or CNG cars with engine capacity up to 1200 cc and length up to 4000 mm and diesel cars with engine capacity up to 1500 cc and length up to 4000 mm.
To provide relief to farmers, the GST rate (Farming Product GST Rate) on agricultural machinery like sprinklers, drip irrigation system and harvesting machinery has been reduced from 12% to 5%.
GST on Air Conditioners (AC) and dishwashers has been reduced from 28% to 18%. All TVs and monitors, irrespective of their size, will now be taxed at a uniform 18%, while large screen TVs and monitors were taxed at 28% earlier.
Hotel accommodation services, where value of supply is up to Rs 7,500 per day, will be taxed at 5% without ITC, down from 18%.
The new GST rate of 40% will apply to all specified actionable claims, including betting (Online Betting GST), casinos, gambling, horse racing, lotteries and online money gaming.
Vision correcting glasses and goggles will now attract 5% GST, while other types of glasses will attract 18% tax.
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