New GST Rates from September 22: Major Tax Cuts on Food, Essentials, and Household Items

New Delhi, Sep 22: The Goods and Services Tax (GST) Council’s major reform came into effect today, slashing taxes on nearly 400 goods and services, including food items, automobiles, electronics, and insurance, in a move aimed at easing the financial burden on consumers.

The revised GST structure has simplified the earlier four-slab system to just two primary rates—5% and 18%—with a special 40% levy continuing for select luxury and sin goods. Several everyday items and essential commodities now attract lower GST, while certain high-value goods, including clothing priced above ₹2,500, will face higher rates.

Key Products with GST Cuts:

• Food Items: Several staples and packaged foods have seen significant reductions. Pre-packaged paneer and chhena, roti, chapati, paratha, pizza bread, and khakra are now in the 0% GST bracket. Condensed milk, butter, ghee, cheese, dried fruits, and nuts—including almonds, pistachios, and Brazil nuts—are taxed at 5%. Citrus fruits like oranges, lemons, grapefruits, and other dried fruits now fall under the 5% category.
• Health and Medicines: Life and health insurance premiums are fully exempt under the new regime. Specific drugs, including Agalsidase Beta, Imiglucerase, and Onasemnogene abeparvovec, also attract a 0% GST, providing relief to patients and policyholders alike.
• Household and Personal Care Items: Essential personal care products such as toilet soaps, talcum powder, hair oil, shampoo, shaving cream, toothpaste, and dental floss have been shifted to the 5% GST slab, making them more affordable for everyday use. Candles, rubber bands, and other small household items also benefit from the reduced rate.
• Stationery and Educational Materials: Uncoated paper and paperboard used for exercise books, graph books, and notebooks, along with pencil sharpeners and maps, now attract 0% GST, easing costs for students and educational institutions.
• Luxury and High-Value Goods: Items such as clothes priced above ₹2,500 have seen an increase from 12% to 18% GST, while luxury goods continue to attract a 40% rate, reflecting the Council’s focus on targeted relief for essentials while maintaining higher taxes on premium products.

The GST Council expects the tax rationalisation to benefit both consumers and businesses by simplifying compliance, reducing cascading effects of indirect taxes, and boosting consumption in the retail sector.

Consumers will notice immediate savings on daily essentials, groceries, personal care products, and health services, while higher-end items like expensive clothing and certain luxury goods will see slightly higher prices.

The new GST regime is part of the government’s broader economic strategy to streamline taxation, promote consumption, and support households amid inflationary pressures.