GST Reforms: What Gets Cheaper And Costlier From Sep 22

The GST Council on Wednesday approved historic changes to India’s indirect tax system by adopting a simplified 5 per cent and 18 per cent structure.

Several goods of daily use will become cheaper from 22 September as items earlier taxed at 12 per cent and 28 per cent move to the lower slabs.

Ultra-high temperature (UHT) milk is now tax-free, while condensed milk, butter, ghee, paneer, and cheese have shifted from 12 per cent to 5 per cent or nil.

Malt, pasta, starches, biscuits, chocolates, and cocoa products will move from 12–18 per cent to 5 per cent.

Dry fruits and nuts, including almonds, cashews, pistachios, hazelnuts, and dates, now attract only 5 per cent GST.

Refined sugar, syrups, and confectionery like toffees and candy have also shifted to the 5 per cent slab.

The Council cut GST on packaged foods such as vegetable oils, animal fats, edible spreads, meat preparations, fish products, and malt extract-based foods.

Popular items like namkeens, bhujia, mixtures, and chabena dropped from 18 per cent to 5 per cent.

Mineral and aerated waters, without added sugar or flavour, also moved from 18 per cent to 5 per cent.

Fertilisers, Healthcare and Consumer Goods Gain Relief

Fertilisers have been reduced from 12 per cent and 18 per cent to 5 per cent. Agricultural inputs such as seeds and crop nutrients also shifted to the 5 per cent slab.

Life-saving medicines, health products, and some medical devices saw their rates cut from 12–18 per cent to 5 per cent or nil.

Entry-level electrical appliances will now attract 18 per cent instead of 28 per cent. Footwear and textiles, both mass-market items, have moved from 12 per cent to 5 per cent, making them more affordable.

However, the Council kept high taxes on tobacco, pan masala, gutkha, and bidi. These products remain under existing cess rates until outstanding cess-linked loans are cleared. Their valuation will now be based on Retail Sale Price (RSP) rather than transaction value to tighten compliance.

Goods containing added sugar, sweeteners, or flavours, including aerated drinks, now face a 40 per cent slab.

The new rate also applies to sin and luxury items such as cigarettes, premium liquor, and high-end cars. Imported armoured luxury sedans will receive exemptions only in special cases, such as those brought in by the President’s Secretariat.

The Council stated that these GST rate cuts will ease costs for consumers, boost compliance, and strengthen the economy.

Also Read: GST Council Approves Two-Tier Tax Structure; Cuts Rates On Consumer Goods