The Government of India’s much-awaited GST rate rationalisation has officially rolled out from today. Announced by Finance Minister Nirmala Sitharaman earlier this month, this move marks one of the most significant tax reforms since GST’s introduction.
Prime Minister Narendra Modi hailed it as a ‘festive bonanza’ and a ‘GST Bachat Utsav’, coinciding with Navratri. The aim is simple, simplify India’s tax regime and reduce costs for consumers, particularly the middle class.
The earlier four-slab GST structure (5%, 12%, 18%, and 28%) has now been streamlined into two major slabs (5% and 18%), plus a special 40% slab for sin and luxury goods. Nearly 400 goods and services have been impacted, making essentials cheaper and luxury consumption costlier.
New GST Rates & Structure at a Glance
The new GST system is designed to ease compliance while offering maximum relief on essentials and everyday goods.
| GST Slab | Categories/Examples | Previous Rate | What Changed |
| 0% (NIL) | Life-saving drugs, UHT milk, paneer, Indian breads (roti, paratha), life & health insurance, stationery (erasers, pencils) | Varied | Exempted from GST |
| 5% | Packaged food, toiletries, medicines, footwear/apparel (≤₹2,500), solar energy, auto parts, diagnostic kits | 12% / 18% | Reduced to 5% |
| 18% | Household appliances (ACs, TVs >32”), dishwashers, fridges, small cars, 2-wheelers ≤350cc, premium clothing (>₹2,500) | 28% / 12% | Rationalised |
| 40% (Special) | Cigarettes, pan masala, soft drinks, luxury cars, superbikes, premium dining, online gambling | 18% / 28% | Increased sharply |
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Goods Cheaper After New GST Rates 2025
After the new GST rates, which took effect from September 22, goods & services from many categories have decreased. Let’s go through them from below:
New GST Rates in Home Appliances & Electronics
Previously taxed at 28%, appliances are now under 18% GST, leading to sharp price reductions.
| Appliance | Previous GST | New GST | Expected Price Drop |
| Air Conditioners | 28% | 18% | ₹3,600 – ₹42,000 per unit |
| Dishwashers | 28% | 18% | ₹1,500 – ₹8,000 |
| TVs (above 32”) | 28% | 18% | ₹2,500 – ₹85,000 |
| Fridges & Washing Machines | 28% | 18% | ₹1,500 – ₹5,000 |
Note: Smartphones & laptops remain unchanged at 18% GST
New GST Rates in FMCG & Daily Essentials
Personal care and packaged foods are now far more affordable.
| Category | Examples | Previous Rate | New Rate |
| Toiletries | Soaps, shampoos, toothpaste, razors, talcum, hair oil | 12% / 18% | 5% |
| Packaged Foods | Butter, ghee, chocolates, juices, namkeen, dry fruits | 12% / 18% | 5% |
| Essentials | UHT milk, paneer, chapati, paratha, khakhra | Taxed | NIL |
Suggested Read: New GST Rates on Daily Essentials
New GST Rates in Automobiles & Transport
The automobile sector gets a festive push.
| Vehicle | Previous GST | New GST | Impact |
| Small Cars | 28% | 18% | Lower on-road costs |
| Two-Wheelers ≤350cc | 28% | 18% | Entry-level bikes cheaper |
| Auto Parts | 28% | 18% | Reduced maintenance costs |
| Buses/Trucks | 28% | 18% | Transport costs down |
Major auto brands like Maruti Suzuki, Tata, Hyundai, and Mahindra have announced price cuts.
New GST Rates in Footwear & Apparel
| Category | Price Range | Old GST | New GST |
| Footwear & Apparel | Up to ₹2,500 | 12% | 5% |
| Premium Clothing | Above ₹2,500 | 12% | 18% |
This correction encourages demand in budget footwear and clothing while taxing luxury fashion higher.
Healthcare & Renewable Energy
| Item/Service | Old GST | New GST |
| Health & Life Insurance | Taxed | Exempt |
| Lifesaving Drugs | Varied | 0% (exempted) |
| Medical Devices | Higher | 5% |
| Solar Energy Solutions | 12% | 5% |
| Power Backup Systems | 28% | 18% |
Also Read: Impact of GST on Healthcare
Price Cuts by Popular Brands After GST Reforms
Several FMCG and household brands have already slashed MRPs.
| Brand | Product | Old Price | New Price | Drop |
| Amul | 1L Ghee | ₹650 | ₹610 | ₹40 |
| 200g Paneer | ₹99 | ₹95 | ₹4 | |
| HUL | Dove Shampoo 340ml | ₹490 | ₹435 | ₹55 |
| Lifebuoy Soap (4x75g) | ₹68 | ₹60 | ₹8 | |
| Patanjali | Nutrela Soya 1kg | ₹210 | ₹190 | ₹20 |
| Dant Kanti (200g) | ₹120 | ₹106 | ₹14 |
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Goods Expensive After GST Reforms
The government has hiked GST on luxury and indulgence goods to 40%.
| Category | Items |
| Sin Goods | Cigarettes, gutka, chewing tobacco |
| Beverages | Coca-Cola, Pepsi, Fanta, carbonated drinks |
| Luxury Vehicles | SUVs >1200cc, superbikes >350cc, yachts, private jets |
| Premium Services | AC restaurants, spas, salons, online gambling |
Personal Loans Can Help You Leverage GST Savings
Even with GST cuts, products like ACs, dishwashers, TVs, and cars remain big-ticket purchases. This is where personal loans can help you spread costs into manageable EMIs.
Benefits of Personal Loans:
- Convert high-value purchases into EMIs.
- No collateral required.
- Can be used for appliances, electronics, or vehicles.
- Quick approvals and flexible tenure.
Example: GST Savings + EMI Option
| Product | Old Price | New Price (with GST cut) | EMI (12 months @12%) |
| Air Conditioner | ₹42,000 | ₹37,000 | ~₹3,300/month |
| Premium TV | ₹85,000 | ₹75,000 | ~₹6,700/month |
| Mid-Range Car | ₹8,00,000 | ₹7,20,000 | ~₹12,800/month (5 years) |
To make the most of these GST cuts, explore personal loans through Buddy Loan, India’s largest digital loan marketplace.
Buddy Loan is not a direct lender, it connects you with a network of verified lenders to get the right loan for your needs.
By pairing GST savings with Buddy Loan’s financing, you can upgrade your lifestyle without straining your budget.
Conclusion
The new GST rates effective from September 22, 2025 bring massive relief across essentials, appliances, transport, and healthcare. While middle-class families save directly on everyday purchases, big-ticket items also become more affordable with tax cuts.
By combining these GST savings with a personal loan via Buddy Loan, you can confidently upgrade your home appliances, buy premium electronics, or even plan a new car purchase, all without burning a hole in your pocket.
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