What Changes in GST Rates Will Make Goods Cheaper or Costlier from September 22?

New Delhi, Sep 4 (NationPress) — Following the GST Council's endorsement of significant alterations to India's indirect tax framework, a range of everyday items is set to become more affordable starting September 22.

The revamped tax structure, introduced on Wednesday, simplifies the system to two primary slabs of 5% and 18%, with a steep 40% rate reserved for sin goods.

For the average citizen, this reform translates to increased disposable income, which the government anticipates will be reinvested into the economy, providing a notable uplift.

A variety of goods, from groceries and fertilizers to footwear, textiles, and even renewable energy, are poised to become less expensive. Items that previously faced taxation rates of 12% and 28% will largely transition to these lower slabs, resulting in a broader range of products becoming more budget-friendly.

Food and Daily Essentials

Milk Products: UHT milk is now tax-exempt (down from 5%), while items like condensed milk, butter, ghee, paneer, and cheese have been reduced from 12% to either 5% or no tax.

Staple Foods: Products such as malt, starches, pasta, cornflakes, biscuits, chocolates, and cocoa will see their rates drop from 12–18% to just 5%.

Dry Fruits and Nuts: Almonds, pistachios, hazelnuts, cashews, and dates, which were previously taxed at 12%, will now be at 5%.

Sugar and Confectionery: Refined sugar, syrup, and confectionery items including toffees and candy have transitioned to the 5% slab.

Other Packaged Foods: Vegetable oils, animal fats, edible spreads, sausages, meat preparations, fish products, and malt extract-based foods will now be taxed at 5%.

Pre-packaged snacks like namkeens, bhujia, and mixtures will see a reduction from 18% to 5%.

Waters: Natural or artificial mineral waters and aerated drinks without added sugars or flavors have moved from 18% to 5%.

Agriculture and Fertilizers

Fertilizers have been lowered from 12%/18% to 5%.

Selected agricultural inputs, including seeds and crop nutrients, have been adjusted from 12% to 5%.

Healthcare

Life-saving medications, health-related products, and certain medical devices will see tax reductions from 12%/18% to 5% or none at all.

Individual life and health insurance policies, including family floater plans, which previously incurred a 12% tax, will now be tax-free.

A significant portion of commonly used medical items, such as thermometers and glucometers, will fall into the 5% tax bracket.

Consumer Goods

Entry-level and commonly used electrical appliances will shift from 28% to 18%.

Footwear and textiles will experience a GST reduction from 12% to 5%, easing costs for mass-market items.

However, certain products remain subject to higher tax rates.

Items such as pan masala, gutkha, cigarettes, chewing tobacco, zarda, unmanufactured tobacco, and bidi will continue to be taxed at elevated GST rates and compensation cess until outstanding cess-linked loans are resolved.

Moreover, the valuation method for these items will transition to Retail Sale Price (RSP) rather than transaction value, enhancing compliance.

All goods (including aerated waters) containing added sugars or flavoring will see a hike from 28% to 40%.

A new 40% slab for sin and luxury goods persists, ensuring that products like cigarettes, premium liquor, and high-end vehicles do not benefit from tax reductions.

Imported luxury sedans will only receive exemption in exceptional circumstances, such as those imported by the President’s Secretariat.