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What Are The Latest GST Rate Change Notification
Do you want to know about the latest GST rate change notification in 2025? If yes, then this article can be of great help for you. After Donald Trump’s 50% tariff imposition on India the GST rate of India has been revised drastically to combat this situation.
India’s GST regime is undergoing drastic transformation in the 56th GST council meeting. GST 2.0 is now net generation GST reforms that is simplifying the tax system in India from 22nd September 2025.
The tax slabs will revolve around some specific rates like 5%, 18%, and 40%. These reforms aim to boost compliance, catalyze economic growth, and consumption patterns.
What Is The Meaning Of GST Rates?
GST rates refer to the percentages of tax applied to goods and services under the Goods and Services Tax (GST) system, a value-added tax implemented in countries like India to streamline indirect taxation. These rates determine how much tax is levied on the supply of various goods and services, replacing multiple state and central taxes to create a unified tax structure.
The GST slabs have been consolidated into 5% (for essentials) and 18% (for non-essentials), eliminating the 12% and 28% slabs for most goods and services. You must go through the latest GST Rate change notification to meet your goals with ease.
A 40% special rate applies to sin goods (e.g., tobacco, pan masala, cigarettes, bidis, aerated water, carbonated/caffeinated beverages) and luxury items (e.g., high-end cars costing ₹50 lakh and above, yachts, helicopters, motorcycles exceeding 350cc).
GST Rates Changes From 56th GST Council Meeting
| Category | Item/service | Previous GST % | New GST % | Notes |
| Life and Health Insurance | All individual life insurance (term, ULIP, endowment), health insurance (family floater, senior citizen), reinsurance | 18% | 0% (Exempt) | Aims to make insurance more affordable. |
| Dairy and Food Items | UHT milk, prepackaged chena/paneer, Indian breads (roti, chapati, paratha, parotta) | 5% or higher | 0% (Exempt) | Enhances affordability of essentials. |
| Medicines and Drugs | 33 life-saving drugs (e.g., for rare diseases, cancer) | 12% | 0% (Exempt) | Supports healthcare accessibility. |
| Medicines and Medical Devices | All drugs and medicines | 12% | 5% | Uniform rate for medicines. |
| Medical Devices | Medical, surgical, dental, veterinary instruments/apparatus | 12% or 18% | 5% | Reduces healthcare costs. |
| Personal Care/Household | Hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste | 12% or 18% | 5% | Lowers cost of daily essentials. |
| Food Items | Packaged namkeens, bhujia, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, ghee | 12% or 18% | 5% | Makes packaged foods more affordable. |
| Agricultural Equipment | Tractors, agricultural/horticultural/forestry machinery, harvesting/threshing machinery, composting machines | 12% | 5% | Boosts the agricultural sector. |
| Other Goods | Bicycles, tableware, kitchenware, natural menthol, fertilizers, handicrafts, marble, granite blocks | 12% or 18% | 5% | Supports small industries and affordability. |
| Corrective Spectacles | Corrective spectacles and goggles | 12% or 18% | 5% | Reduces cost of vision care. |
| Automobiles | Small cars (petrol/LPG/CNG ≤1200cc, diesel ≤1500cc, length ≤4000mm), motorcycles ≤350cc | 28% | 18% | Makes entry-level vehicles cheaper. |
| Auto Components | Auto parts/components | 28% | 18% | Benefits automotive industry. |
| Ambulances | Properly fitted ambulances | 28% | 18% | Supports healthcare infrastructure. |
| Consumer Durables | Air conditioners, dishwashing machines, TVs, monitors | 28% | 18% | Reduces cost of electronics. |
| Construction Materials | Cement, steel | 28% | 18% | Lowers construction costs, benefits housing/infrastructure. |
| Non-Corrective Goggles | Non-corrective goggles | 18% | 18% | No change. |
| Electric Vehicles (EVs) | Electric vehicles | 5% | 5% | No change, supports green mobility. |
| Hydrogen Fuel Cell Vehicles | FCEVs | 12% | 5% | Promotes sustainable transport. |
| Renewable Energy | Parts for manufacturing renewable energy devices | 12% | 5% | Encourages clean energy. |
| Coal and Lignite | Coal, lignite | 5% + ₹400/ton cess | 18% | Cess merged into GST, no net tax increase. |
| Sin Goods | Pan masala, gutkha, cigarettes, bidis, unmanufactured tobacco | 28% + cess | 40% | Effective later (date TBD), taxed on Retail Sale Price. |
| Luxury Vehicles | Mid-size/large cars (>4000mm or >1500cc), SUVs/MUVs/MPVs/XUVs (>1500cc, >4000mm, >170mm clearance), motorcycles >350cc | 28% + 17–22% cess | 40% | Replaces cess with single rate. |
| Luxury Goods | Yachts, helicopters, aerated/caffeinated beverages | 28% + cess | 40% | Targets high-end consumption. |
| Special Exemption | Armored sedans for President of India | Applicable rate | 0% exempt | Specific import conditions apply. |
Which Commodities Prices Hikes As Per Latest GST Rates
There are certain commodities whose price will rise as per the latest price hikes in the upcoming changes in the GST rates. So, in the table below you will get the complete details of it one after the other. So, lets find out the latest GST Rate Change Notification in India as per the meeting held in September.
| Commodity | Previous GST Rates | New GST Rates |
| Coal | 5% | 18% |
| Lignite (whether or not agglomerated, excluding jet)
Peat (including peat litter, whether or not agglomerated) |
5% | 18% |
| Chemical wood pulp, dissolving grades | 5% | 18% |
| Biodiesel (other than supplied to Oil Marketing Companies for blending with High Speed Diesel) | 12% | 18% |
| Odoriferous preparations which operate by burning (other than agarbattis, lobhan, dhoop batti, dhoop, sambhrani) | 12% | 18% |
| Uncoated paper and paperboard (other than for exercise books, graph books, etc.) | 12% | 18% |
| Composite paper/paperboard, corrugated paper/paperboard | 12% | 18% |
| Articles of apparel and clothing accessories, knitted or crocheted, of sale value exceeding ₹2,500 per piece | 12% | 18% |
| Articles of apparel and clothing accessories, not knitted or crocheted, of sale value exceeding ₹2,500 per piece | 12% | 18% |
| Cotton quilts of sale value exceeding ₹2,500 per piece | 12% | 18% |
| Products wholly made of quilted textile material exceeding ₹2,500 per piece | 12% | 18% |
| Pan masala | 28% | 40% |
| Gutkha | 28% | 40% |
| Cigars, cheroots, cigarillos, and cigarettes of tobacco or substitutes | 28% | 40% |
| Unmanufactured tobacco (other than tobacco leaves); tobacco refuse | 28% | 40% |
| Chewing tobacco (like zarda) | 28% | 40% |
| Other manufactured tobacco and substitutes; “homogenised” or “reconstituted” tobacco; tobacco extracts and essences | 28% | 40% |
| Products containing tobacco or reconstituted tobacco intended for inhalation without combustion | 28% | 40% |
| Products containing tobacco or nicotine substitutes intended for inhalation without combustion | 28% | 40% |
| Aerated waters containing added sugar or other sweetening matter or flavoured | 28% | 40% |
| Carbonated beverages of fruit drink or carbonated beverages with fruit juice | 28% | 40% |
| Caffeinated beverages | 28% | 40% |
| Other non-alcoholic beverages (excluding plant-based milk drinks, soya milk drinks, fruit pulp or fruit juice-based drinks, and beverages containing milk) | 18% | 40% |
| Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars (with engine capacity exceeding 1200cc or length exceeding 4000mm for certain types) | 28% | 40% |
| Motor vehicles with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion, of engine capacity exceeding 1200cc or of length exceeding 4000mm | 28% | 40% |
| Motorcycles of engine capacity exceeding 350cc | 28% | 40% |
| Aircraft for personal use | 28% | 40% |
| Yachts and other vessels for pleasure or sports | 28% | 40% |
| Revolvers and pistols | 28% | 40% |
| Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof | 28% | 40% |
Additional Notes
- The 56th GST Council meeting (September 3–4, 2025) focused primarily on rate reductions and simplifications, but these specific commodities saw rate increases, often targeting sin goods, luxury items, or merging cess for uniformity.
- For sin goods (e.g., tobacco products), the hike replaces the previous 28% GST + compensation cess structure with a flat 40% on Retail Sale Price (RSP), which may result in a net hike depending on previous effective cess rates (which varied, e.g., up to 290% for some pan masala).
- Most changes are effective from September 22, 2025, except for tobacco-related items, which will be implemented later.
- Price hikes are expected for these items due to higher tax rates, potentially affecting retail prices unless absorbed by manufacturers.
Types Of GST Rates & GST Rate Structure In India
The Goods and Services Tax (GST) in India, introduced on July 1, 2017, is a unified indirect tax system that replaced multiple state and central taxes. The GST rate structure was significantly revised following the 56th GST Council meeting (September 3–4, 2025), effective from September 22, 2025.
The council simplified the previous four-tier structure (5%, 12%, 18%, 28%) into a two-tier structure with rates of 5% and 18%, alongside a 40% special rate for sin and luxury goods, and a 0% (exempt) category for essential items. You must go through the latest GST Rate Change notification to get the complete idea into it.
Types Of GST In India
GST in India is categorized into four types based on the nature of the transaction and the authority collecting the tax:
1. Central GST (CGST):
- Levied by the Central Government on intra-state supplies of goods and services.
- Revenue goes to the central government.
- Example: For a good taxed at 18% GST, 9% is CGST (if the total GST rate is split equally with SGST).
2. State GST (SGST):
- Levied by the State Government on intra-state supplies.
- Revenue goes to the state government.
- Example: For the same 18% GST good, 9% is SGST.
3. Integrated GST (IGST):
- Levied by the Central Government on inter-state supplies and imports.
- Revenue is shared between the central and state governments.
- Example: A good taxed at 18% for inter-state supply has the full 18% as IGST.
4. Union Territory GST (UTGST):
- Levied by Union Territory administrations on intra-union territory supplies (in place of SGST).
- Revenue goes to the respective union territory.
- Example: For a 5% GST good in a union territory, 2.5% is CGST and 2.5% is UTGST.
GST Rate Structure In India (Post-56th GST Council Meeting)
The GST rate structure was simplified to promote affordability, boost consumption, and streamline compliance. The revised structure, effective from September 22, 2025, is as follows:
1. 0% GST ( Exempt)
Description: Goods and services essential for basic needs or public welfare are fully exempt from GST.
Purpose: To ensure affordability of necessities and promote social welfare.
Examples:
- Dairy and Food Items: Ultra-High Temperature (UHT) milk, prepackaged chena/paneer, Indian breads (roti, chapati, paratha, parotta).
- Life and Health Insurance: All individual life insurance (term, ULIP, endowment), health insurance (family floater, senior citizen), and reinsurance services.
- Medicines: 33 life-saving drugs (e.g., for rare diseases, cancer).
- Other: Armored sedans imported for the President of India (under specific conditions), unbranded food items like food grains, fresh vegetables, and milk.
2. 5% GST
Description: Applied to essential goods and services to keep them affordable for the common man.
Purpose: To reduce the tax burden on daily necessities and support sectors like agriculture and healthcare.
Examples:
- Medicines and Medical Devices: All drugs, medical/surgical/dental/veterinary instruments and apparatus (previously 12% or 18%).
- Personal Care/Household: Hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware (previously 12% or 18%).
- Food Items: Packaged namkeens, bhujia, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, ghee (previously 12% or 18%).
- Agricultural Equipment: Tractors, agricultural/horticultural/forestry machinery, harvesting/threshing machinery, composting machines (previously 12%).
- Other Goods: Natural menthol, fertilizers, handicrafts, marble, granite blocks, corrective spectacles/goggles (previously 12% or 18%).
- Transport: Electric vehicles (EVs), hydrogen fuel cell vehicles (FCEVs, reduced from 12%), renewable energy device parts (previously 12%).
- Services: Beauty and physical well-being services (e.g., gyms, salons, barbers, yoga centers, reduced from 18%).
3. 18% GST
Description: Applied to non-essential goods and services, forming the standard rate for most taxable items.
Purpose: To generate revenue while keeping taxes reasonable for non-luxury goods.
Examples:
- Automobiles: Small cars (petrol/LPG/CNG ≤1200cc, diesel ≤1500cc, length ≤4000mm), motorcycles ≤350cc, auto components/parts, ambulances (previously 28%).
- Consumer Durables: Air conditioners, dishwashing machines, TVs, monitors (previously 28%).
- Construction Materials: Cement, steel (previously 28%).
- Energy/Fuels: Coal, lignite, peat (increased from 5% + ₹400/ton cess, with cess merged into GST, no net tax burden increase).
- Chemicals: Chemical wood pulp (dissolving grades), biodiesel (other than for blending with high-speed diesel), odoriferous preparations (other than agarbattis, etc.) (increased from 12%).
- Paper Products: Uncoated paper/paperboard (other than for exercise books), composite/corrugated paper/paperboard (increased from 12%).
- Textiles: Articles of apparel/clothing accessories (knitted or not) and quilts exceeding ₹2,500 per piece (increased from 12%).
- Other: Non-corrective goggles (unchanged).
4. 40% GST
Description: Applied to sin goods (e.g., tobacco, aerated drinks) and luxury items to discourage consumption and target high-end markets.
Purpose: To generate higher revenue from non-essential or harmful goods and luxury consumption.
Examples:
- Sin Goods – Tobacco (effective date to be notified later):
- Pan masala, gutkha, cigarettes, cigars, chewing tobacco, unmanufactured tobacco, tobacco substitutes (previously 28% + cess, now taxed on Retail Sale Price).
- Beverages: Aerated waters (with sugar/flavor), carbonated fruit juice beverages, caffeinated beverages, other non-alcoholic beverages (excluding plant-based milk drinks, etc.) (increased from 28% or 18%).
- Luxury Transport:
- Mid-size/large cars (>4000mm or >1500cc), SUVs/MUVs/MPVs/XUVs (>1500cc, >4000mm, >170mm clearance), motorcycles >350cc (previously 28% + 17–22% cess).
- Aircraft for personal use, yachts, and other vessels for pleasure/sports (previously 28% + cess).
- Other: Revolvers, pistols, smoking pipes, cigar/cigarette holders (previously 28%).
List Of NIL Rated GST Items As Per Latest Updates
You must go through the latest GST rate change notification as per latest updates to meet your requirements with ease. Some of the crucial NIL rated GST items as per latest updates are as follows:-
| Items/ Service | Previous GST rates | New GST Rate | Notes |
| Ultra-High Temperature (UHT) milk | 5% | 0%(Exempt) | Enhances affordability of essential dairy products. |
| Prepackaged chena or paneer | 5% | 0%(Exempt) | Supports affordability of staple food items. |
| Indian breads (e.g., roti, chapati, paratha, parotta) | 5% | 0%(Exempt) | Covers both prepackaged and non-prepackaged breads, making traditional foods tax-free. |
| 33 life-saving drugs (e.g., for rare diseases, cancer) | 12% | 0%(Exempt) | Includes drugs for critical conditions to improve healthcare access. |
| Individual life insurance policies (term, ULIP, endowment) | 18% | 0%(Exempt) | Makes life insurance more affordable, encouraging wider coverage. |
| Health insurance policies (including family floater and senior citizen plans) | 18% | 0%(Exempt) | Aims to reduce healthcare costs and promote insurance penetration. |
| Reinsurance services for life and health insurance | 18% | 0%(Exempt) | Supports the insurance sector by reducing costs. |
| Armored sedans imported for the President of India | Applicable rate typically 28% | 0%(Exempt) | Exemption applies under specific import conditions for official use. |
| Food grains (e.g., rice, wheat) | 0% | 0%(Exempt) | Remains exempt as essential staples. |
| Fresh milk | 0% | 0%(Exempt) | Continues to be tax-free as a basic necessity. |
| Fresh vegetables and fruits | 0% | 0%(Exempt) | Remains exempt to ensure affordability. |
| Services by educational institutions (up to higher secondary) | 0% | 0%(Exempt) | Continues to support access to education. |
| Healthcare services (e.g., hospitals, clinics) | 0% | 0%(Exempt) | Remains exempt to promote affordable healthcare. |
| Public transport services (e.g., metro, non-AC buses) | 0% | 0%(Exempt) | Continues to be tax-free to support affordable mobility. |
List Of Items Taxed At 5% GST Rate
| Specific Items | Current GST Rate | Previous GST rate |
| Packaged namkeens, bhujia, sauces, noodles, chocolates | 5% | 12% or 18% |
| Butter, ghee, cheese, dairy spreads, dry nuts, condensed milk | 5% | 12% or 18% |
| Fruit pulp, fruit juices, milk-based beverages, tender coconut water | 5% | 12% or 18% |
| Plant-based milk drinks, soya milk drinks | 5% | 12% or 18% |
| Indian sweets, sugar confectionery, jams, jellies | 5% | 12% or 18% |
| Pre-packaged and labelled millet flour (70% millet composition) | 5% | 0% |
| Sugar, tea | 5% | 5% |
| Hair oil, shampoo, toothpaste, tooth powder, toothbrushes, shaving cream, soap | 5% | 18% |
| Talcum powder, face powder | 5% | 18% |
| Tableware, kitchenware, utensils, combs | 5% | 12% |
| Feeding bottles, napkins for babies, clinical diapers | 5% | 12% |
| Umbrellas, bamboo furniture, bicycles | 5% | 12% |
| Life-saving drugs, medicines for rare diseases, medical oxygen | 5% | 12% or 18% |
| Thermometers, glucometers, test strips, diagnostic kits, corrective spectacles | 5% | 12% or 18% |
| Footwear (all types, including under Rs. 500) | 5% | 12% |
| Articles of apparel and clothing accessories (sale value ≤ Rs. 2500 per piece) | 5% | 12% |
| Tractors, harvesting/threshing machinery, composting machines | 5% | 12% |
| Hand pumps, nozzles for drip irrigation, sprinklers, self-loading trailers | 5% | 12% |
| Fixed speed diesel engines (≤ 15HP) | 5% | 12% |
| Sand, marble rubble | 5% | 5% |
| Molasses | 5% | 28% |
| Imitation zari thread/yarn | 5% | 12% |
List Of Items Taxed At 18% GST Rate
| Items | Current GST Rate | Previous GST Rate |
| Air conditioners, refrigerators, TVs (up to 32 inches), dishwashers, washing machines, computer monitors, printers | 18% | 28% |
| All mobile phones (HSN Code 85171219) | 18% | 18% (increased from 12% in April 2020) |
| Small cars (petrol/LPG/CNG <1,200 cc, <4,000 mm; diesel <1,500 cc, <4,000 mm), motorcycles (≤350 cc), road tractors (≤1,800 cc), used EVs/vehicles (taxed on margin) | 18% | Small cars: 28% + cess (17–22%), Motorcycles: 28%, Used EVs: 12% |
| Cement, paints, varnishes | 18% | Cement: 28%, Paints/Varnishes: 18% |
| Hair oil, toothpaste, soap, cosmetics, perfumes | 18% | 18% (some items reduced from 28% in 2017) |
| Ice cream, packaged foods (pasta, cornflakes, biscuits), chocolates | 18% | 18% |
| Apparel (sale value > Rs. 2,500), cotton quilts (> Rs. 2,500) | 18% | 18% |
| Furniture (except bamboo furniture) | 18% | 28% |
| Telecom services, IT services, work contracts, restaurant services (non-AC), amusement parks, cinema tickets | 18% | 18% |
| Industrial intermediaries (machinery components), footwear (> Rs. 2,500) | 18% | 18% (some items reduced from 28% earlier) |
List Of Items Taxed At 40% GST Rate
There are certain list of items that are taxed at 40% GST rates that can make your purchase critical if you are not aware of it.
| Items | Current GST rate | Previous GST Rate |
| Large SUVs and luxury cars (>4,000 mm length, petrol >1,200 cc, diesel >1,500 cc, or ground clearance ≥170 mm), strong hybrid passenger vehicles (e.g., Toyota Vellfire, Lexus LM, BMW XM) | 40% | 28% + 15–22% cess (total 43–50%) |
| Motorcycles with engine capacity >350 cc | 40% | 28% |
| All types of aerated water, carbonated beverages, caffeinated drinks, non-alcoholic beverages with fruit juice | 40% | 28% + 12% cess (total 40%) |
| Helicopters, personal use aircraft, yachts | 40% | 28% + cess (variable, up to 22%) |
| Betting, gambling, horse racing, lottery, online money gaming | 40% | 28% |
| Cigarettes, pan masala, gutka, chewing tobacco, zarda, unmanufactured tobacco, bidis | 28% + cess (pending transition to 40%) | 28% + cess (1–204%) |
Final Takeaway
Hence, these are some of the crucial changes in the GST tax rates in India as per the income tax act 2025. You need to be well aware of the latest GST rate change notification to meet your requirements with ease. Ensure that you follow the correct solution from your end.
You can share your views and opinions in our comment box this will help us to know your take on this matter. Here, proper application of the knowledge about the GST rates can make things work well in your way.
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