What Changes in GST Will Make Goods Cheaper or Costlier from September 22?
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Synopsis
Discover how new GST rates will impact your wallet! From groceries to healthcare, various everyday items will become more affordable starting September 22. Learn what’s changing and what remains the same in this comprehensive overview.
Key Takeaways
- GST rates for essential goods reduced to 5%.
- Life-saving medications are now less taxed.
- Luxury goods will not see any tax relief.
- Compliance tightening with Retail Sale Price valuation.
- Significant reductions in agricultural input taxes.
New Delhi, Sep 3 (NationPress) The GST Council has made landmark adjustments to India's indirect tax system, implementing new tax rates of 5% and 18%. As a result, numerous daily essentials are set to become more affordable starting September 22.
Key items affected include:
Food and Daily Essentials
Milk Products: Ultra-high temperature (UHT) milk will be exempt from tax (down from 5%), while items like condensed milk, butter, ghee, paneer, and cheese have shifted from 12% to 5% or even tax-free.
Staple Foods: Malt, starches, pasta, cornflakes, biscuits, and chocolate products will see reductions from 12%-18% to just 5%.
Dry Fruits and Nuts: Almonds, pistachios, hazelnuts, cashews, and dates will now only incur a 5% tax, down from 12%.
Sugar and Confectionery: Refined sugar, syrups, and confectionery such as toffees will now fall under the 5% tax bracket.
Other Packaged Foods: Items like vegetable oils, animal fats, and processed meats will also see a reduction to 5%.
Agriculture and Fertilisers: Fertilisers will now be taxed at 5%, down from previous rates of 12% and 18%. Key agricultural inputs, including seeds and nutrients, have also been adjusted from 12% to 5%.
Healthcare: Life-saving medications, health-related products, and some medical devices will be taxed at 5% or not at all, down from 12%/18%.
Consumer Goods: Basic electrical appliances will see a tax drop from 28% to 18%, while footwear and textiles will be taxed at 5%, down from 12%.
However, certain products remain subject to higher tax rates, including pan masala, cigarettes, and chewing tobacco, which will continue to bear existing high GST rates.
Moreover, the valuation of these products will now adhere to Retail Sale Price (RSP), enhancing compliance. All sugary drinks will see an increase in tax from 28% to 40%.
A newly established 40% tax bracket for luxury and sin goods ensures that items such as cigarettes, premium liquor, and luxury vehicles will not benefit from tax reductions.
Luxury vehicles imported under special circumstances, such as those for the President’s Secretariat, will also be exempted.
Point of View
It's crucial to understand how these GST changes reflect the government's efforts to make essential goods more accessible to the public. While some items will see a decrease in tax, others remain under stringent tax rates. This balanced approach highlights the ongoing challenges in India's tax landscape.
NationPress
03/09/2025
Frequently Asked Questions
What is the new GST rate for food products?
Food products such as milk, biscuits, and chocolates will see a reduced GST rate of 5% starting September 22.
Are luxury goods getting a tax reduction?
No, luxury items will continue to be taxed at a 40% rate, ensuring that premium products remain unaffected by the recent changes.
What agricultural inputs will be taxed less?
Fertilisers and select agricultural inputs, including seeds, will now be taxed at 5%, down from higher rates.
How will these changes affect healthcare products?
Life-saving drugs and some medical devices will now see a tax reduction to 5% or be exempt from tax entirely.
Will sugary beverages see an increase in tax?
Yes, sugary beverages will see an increase from 28% to 40%.
