The Update
Starting Navratri, September 22, 2025, India’s GST system undergoes its biggest revamp yet. The old 4-slab structure is gone, replaced by a simpler two-rate model (5% & 18%), plus a 40% slab for sin and luxury goods.
What’s Getting Cheaper
- Essentials now 0% or 5% GST: Milk, paneer, roti, butter, noodles, chocolates, medicines.
- Daily services at 5% GST: Dining, salons, gyms, hotels, domestic travel.
- Insurance relief: All individual life & health insurance policies are GST-free.
What Stays Costly
- Lifestyle & aspirational goods at 18%: Air conditioners, TVs, small cars, cement, auto parts.
- Sin & luxury items at 40%: Tobacco, pan masala, alcohol, aerated drinks, luxury cars.
Quick Comparison
| Category | Before (Old Slabs) | Now (GST 2.0) |
|---|---|---|
| Essentials & Food | 5%, 12%, 18% | 0% or 5% |
| Services (dining, gyms) | 12% – 18% | 5% |
| Insurance | 18% | 0% |
| Autos, cement, lifestyle | 18% – 28% | 18% |
| Sin/Luxury Goods | 28% + cess | 40% |
Why It Matters
- Middle-class households see real relief on food, dining, and health.
- Travel & hospitality get a festive boost with lower GST.
- Insurance going GST-free makes protection more affordable.
- High-end goods remain taxed heavily to balance revenue.
My Take
Think of this as an early Diwali gift from the GST Council. Everyday living gets lighter, insurance becomes smarter, and festive spending gets a nudge. But if you’re eyeing a new SUV, luxury watch, or that extra-large TV, the taxman hasn’t forgotten you.
Effective: September 22, 2025 (Navratri Day 1)