GST Council Slashes Tax Slabs To 5% & 18%: What Gets Cheaper & What Gets Costlier | FULL LIST
The Goods and Services Tax (GST) Council has simplified India’s indirect tax system by cutting down the existing four slabs to just two. Responding to a long-standing demand from the middle class, the Council has scrapped the 12% and 28% rates, retaining only the 5% and 18% slabs – a change expected to ease household budgets and lift consumer sentiment.
The decision came after a marathon meeting of the GST Council, the apex decision-making body on indirect taxes, chaired by Union Finance Minister Nirmala Sitharaman, with representatives from all states. The overhauled GST regime, with only two main rates – 5% and 18% – will be implemented from September 22.
Here is what gets cheaper and costlier under the new GST regime:
Food and Daily Essentials, including Milk products, dry fruits, and nuts, are getting cheaper under the new GST regime
WHAT IS GETTING CHEAPER UNDER THE NEW GST REGIME?
Milk products: UHT milk is now tax-free (down from 5%), while condensed milk, butter, ghee, paneer, and cheese have moved from 12% to 5% or nil. Staple foods: Items like malt, starches, pasta, cornflakes, biscuits, chocolates, and cocoa products will see reductions from 12–18% to 5%. Dry fruits and nuts: Almonds, pistachios, hazelnuts, cashews, and dates drop from 12% to 5%.
Consumer Goods, including Electronics, paper, footwear, textiles and other sectors such as renewable energy is getting cheaper under new GST regime.
WHAT IS GETTING CHEAPER UNDER THE NEW GST REGIME?
Consumer Goods: Electronics: Entry-level appliances drop from 28% to 18%.
Footwear and textiles: Reduced from 12% to 5%.
Paper sector: Certain grades cut from 12% to nil.
Renewable energy devices: 12% to 5%.
Construction inputs: 12% to 5%.
Sports goods and toys: 12% to 5%.
Leather, wood, and handicrafts: Brought under the 5% bracket.
Staple foods, Sugar and confectionery, and Other packaged foods are getting cheaper under new GST regime
WHAT IS GETTING CHEAPER UNDER THE NEW GST REGIME?
Items like malt, starches, pasta, cornflakes, biscuits, chocolates, and cocoa products will see reductions from 12–18% to 5%.
Refined sugar, sugar syrups, toffees, and candy shift to the 5% bracket.
Vegetable oils, animal fats, edible spreads, sausages, meat preparations, fish products, and malt extract-based packaged foods move to 5%.
Agriculture and Fertilisers; Healthcare and Education services get cheaper under new gst regime
WHAT IS GETTING CHEAPER UNDER THE NEW GST REGIME?
Fertilisers cut from 12%/18% to 5%.
Agricultural inputs like seeds and crop nutrients reduced from 12% to 5%.
Life-saving drugs, health-related products, and medical devices moved from 12%/18% to 5% or nil.
Educational services and items such as books and learning aids brought down from 5%–12% to nil or 5%.
Luxury and Premium Items get costlier under new GST regime
WHAT IS GETTING COSTLIER UNDER THE NEW GST REGIME?
A new 40% slab remains for sin and luxury goods, keeping items such as cigarettes, premium liquor, and high-end cars outside tax relief.
Imported armoured luxury sedans will be exempt only in special cases, such as those brought in by the President’s Secretariat.
Various services, including certain restaurant services, get costlier under the new GST regime.
WHAT IS GETTING COSTLIER UNDER THE NEW GST REGIME?
Restaurants within “specified premises” can no longer opt for the 18% with ITC option, closing a loophole.
Certain lottery and intermediary services will face revised valuation rules, maintaining or raising their tax burden.
Despite the wide relief, some goods and services remain under higher taxation, including sin goods, non-renewable fuels
WHAT IS GETTING COSTLIER UNDER THE NEW GST REGIME?
Luxury and Premium Items
A new 40% slab remains for sin and luxury goods, keeping items such as cigarettes, premium liquor, and high-end cars outside tax relief.
Imported armoured luxury sedans will be exempt only in special cases, such as those brought in by the President’s Secretariat.
Energy and Fuels
Coal, earlier taxed at 5%, will now attract 18%, increasing costs for coal-based industry
