{"id":41939,"date":"2025-09-05T15:14:18","date_gmt":"2025-09-05T09:44:18","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/learn\/?p=41939"},"modified":"2025-09-05T15:16:28","modified_gmt":"2025-09-05T09:46:28","slug":"gst-2-0-reforms","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/gst-2-0-reforms\/","title":{"rendered":"GST 2.0 Reforms – New GST Rates 2025"},"content":{"rendered":"

The Goods and Services Tax (GST<\/a>) Council has announced a landmark reform in India\u2019s indirect taxation system. GST was introduced in 2017 to replace a single, transparent tax system across India with a multiple tax system. The four different rates – 5 %, 12%, 18%, and 28% on the goods and services confused the common man. The reform has simplified the tax system into two major slabs: 5% and 8%, and a 40% rate for luxury goods and services, as well as harmful goods. The new reform is intended to boost the consumption by 60% of India\u2019s Gross Domestic Product (GDP). For a common man, this means cheaper groceries, medicines, household goods, and educational supplies and at the same time, the new GST rates that luxury goods, cars, carbonated drinks, tobacco, and gambling attract the highest tax possible.<\/p>\n

This blog will help you to understand the new GST rates in detail and compare the old rates with the new ones.<\/p>\n

Effective Date of the GST 2.0 Reform<\/h2>\n

The GST reform shall be effective from 22.09.2025.<\/p>\n

5% slab<\/strong> \u2192 It covers the essential goods and services.<\/p>\n

18% slab<\/strong> \u2192 It covers the most goods and services of general consumption.<\/p>\n

40% special slab<\/strong> \u2192 High percentage applied on the luxury items, automobiles, tobacco, aerated drinks, gambling, and similar activities.<\/p>\n

GST Structure 2025: Old Vs New Rates<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Essentials and Packaged Foods<\/strong><\/td>\n<\/tr>\n
S. No. <\/strong><\/td>\nItem \/ Group\/Services <\/strong><\/td>\nOld Rate<\/strong><\/td>\nNew Rate<\/strong><\/td>\n<\/tr>\n
1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nIndian breads, including chapati\/roti, paratha\/parotta<\/td>\n5%<\/td>\nNil<\/td>\n<\/tr>\n
2.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nUHT milk<\/td>\n5%<\/td>\nNil<\/td>\n<\/tr>\n
3.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nChena\/paneer pre-packaged and labelled<\/td>\n5%<\/td>\nNil<\/td>\n<\/tr>\n
4.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCondensed milk<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
5.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nButter, ghee, butter oil<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
6.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCheese<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
7.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nDry fruits & nuts such as almonds, pistachios, etc., dried fruits<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
8.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCommon packaged foods such as namkeen\/bhujia, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, etc.<\/td>\n12-18%<\/td>\n5%<\/td>\n<\/tr>\n
Plant-based and Speciality Dairy Alternatives<\/strong><\/td>\n<\/tr>\n
9.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nPlant-based milk drinks<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
10.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nSoya milk drinks<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
Personal Care and Home Care<\/strong><\/td>\n<\/tr>\n
11.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nHair oil, shampoos<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
12.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAll kinds of dishwashers<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
13.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nToothpaste, toothbrushes, dental floss<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
14.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nToilet soaps (bars\/cakes), shaving creams\/lotions<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
15.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nTalcum\/face powders, aftershave<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
16.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nUtensils & table\/kitchenware; umbrellas; baby feeding bottles; bicycles & parts; bamboo\/cane\/rattan furniture; combs; hurricane\/kerosene lamps<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
Electric Appliances<\/strong> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/td>\n<\/tr>\n
17.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAir-conditioners<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
18.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nTelevisions and monitors\/projectors \/ set-top boxes<\/p>\n

(all TVs now at 18%)<\/td>\n

28%<\/td>\n18%<\/td>\n<\/tr>\n
19.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nSolar water heaters\/systems<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
Stationery, Paper and Books<\/strong><\/td>\n<\/tr>\n
20.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nPencils, crayons\/pastels, maps\/charts\/globes, exercise\/notebooks<\/td>\n12%<\/td>\nNil<\/td>\n<\/tr>\n
21.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nErasers<\/td>\n5%<\/td>\nNil<\/td>\n<\/tr>\n
22.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nUncoated paper\/paperboard used for notebooks<\/td>\n12%<\/td>\nNil<\/td>\n<\/tr>\n
23.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nPulps and several packaging papers, including paper sacks\/biodegradable bags, trays, cartons\/boxes)<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
24.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nset of higher-grade papers, such as those with the dissolving pulp, certain coated papers)<\/td>\n12%<\/td>\n`8%<\/td>\n<\/tr>\n
Healthcare (medicines, devices, and supplies)<\/strong><\/td>\n<\/tr>\n
25.\u00a0 <\/strong>\u00a0<\/strong><\/td>\n33 life-saving drugs<\/td>\n12%<\/td>\nNil<\/strong><\/td>\n<\/tr>\n
26.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAll other drugs and medicines<\/td>\n5%<\/td>\nNil<\/strong><\/td>\n<\/tr>\n
27.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nMedical devices\/apparatus used for medical\/surgical\/dental\/veterinary or lab analysis<\/td>\n12%<\/td>\n5%<\/strong><\/td>\n<\/tr>\n
28.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nSupplies like wadding\/gauze\/bandages, diagnostic kits & reagents, glucometers\/test-strips<\/td>\n18%<\/td>\n5%<\/strong><\/td>\n<\/tr>\n
29.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCorrective spectacles<\/td>\n12%<\/td>\n5%<\/strong><\/td>\n<\/tr>\n
30.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nThermometers<\/td>\n12%<\/td>\n5%<\/strong><\/td>\n<\/tr>\n
Insurance<\/strong><\/td>\n<\/tr>\n
31.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nIndividual life insurance (all the types, including term, ULIP, and endowment) + reinsurance<\/td>\n18%<\/p>\n

(with ITC)<\/td>\n

Nil<\/td>\n<\/tr>\n
32.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nIndividual health insurance (including family floater\/senior citizen) + reinsurance<\/td>\n18%<\/p>\n

(with ITC)<\/td>\n

Nil<\/td>\n<\/tr>\n
Vehicles and automobile components<\/strong><\/td>\n<\/tr>\n
33.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nSmall cars<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
34.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nMotorcycles \u2264 350cc<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
35.\u00a0 <\/strong>\u00a0<\/strong><\/td>\n3-wheelers; buses, trucks, ambulances<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
36.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nUniform rate on auto parts<\/td>\nMixed rate<\/td>\n18% (uniform)<\/td>\n<\/tr>\n
37.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nEVs<\/td>\n5%<\/td>\n5%<\/p>\n

(no change)<\/td>\n<\/tr>\n

38.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nSmall petrol\/LPG\/CNG cars (<1200cc, \u22644,000mm) & small diesel cars (\u22641500cc, \u22644,000mm)<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
Agriculture, irrigation and items used in rural areas<\/strong><\/td>\n<\/tr>\n
39.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nTractors (except road tractors >1800cc)<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
40.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nFixed-speed diesel engines \u226415HP; agricultural diesel engine (>250cc) for tractors<\/td>\n12-18%<\/td>\n5%<\/td>\n<\/tr>\n
41.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nHydraulic pumps for tractors; other hand pumps<\/td>\n18%\/12%<\/td>\n5%<\/td>\n<\/tr>\n
42.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nNozzles\/sprinklers; drip irrigation systems<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
43.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nMachinery for soil prep\/harvesting\/threshing; composting machines<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
44.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nFertiliser inputs: sulphuric acid, nitric acid, ammonia<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
45.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nMicronutrients under FCO 1985; biopesticides (Bt, Trichoderma, neem, etc.)<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
Construction and Energy<\/strong><\/td>\n<\/tr>\n
46.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCement<\/td>\n28%<\/td>\n18%<\/td>\n<\/tr>\n
47.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCoal (with cess rationalisation)<\/td>\n5%<\/p>\n

(cess varies)<\/td>\n

18%<\/td>\n<\/tr>\n
Sewing machines, their parts, and yarn<\/strong><\/td>\n<\/tr>\n
48.\u00a0 <\/strong><\/td>\nSewing machines<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
49.\u00a0 <\/strong><\/td>\nParts of sewing machines<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
50.\u00a0 <\/strong><\/td>\nNeedles<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
51.\u00a0 <\/strong><\/td>\nMan-made fibre<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n
52.\u00a0 <\/strong><\/td>\nYarn<\/td>\n12%<\/td>\n5%<\/td>\n<\/tr>\n
53.\u00a0 <\/strong><\/td>\nFertiliser inputs (chemicals like sulphuric acid, ammonia<\/td>\n18%<\/td>\n5%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Hotels, Flights & Transport Services<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
S. No. <\/strong><\/td>\nService<\/strong><\/td>\nOld<\/strong><\/td>\nNew<\/strong><\/td>\nITC<\/strong><\/td>\n<\/tr>\n
54.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nHotel accommodation less than \u20b97,500 per room\/night<\/td>\n12%<\/td>\n5%<\/td>\nWithout ITC<\/td>\n<\/tr>\n
55.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAir tickets for the economy class<\/td>\n5%<\/td>\n5%<\/td>\nNo change<\/td>\n<\/tr>\n
56.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAir tickets other than economy<\/td>\n12%<\/td>\n18%<\/td>\nWith ITC<\/td>\n<\/tr>\n
57.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nGoods transport by GTA<\/td>\n5% no ITC<\/p>\n

OR<\/p>\n

12% with ITC<\/td>\n

5% no ITC<\/p>\n

OR<\/p>\n

18% with ITC<\/td>\n

As shown<\/td>\n<\/tr>\n
58.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nContainer rail (non-IR)<\/td>\n12%<\/td>\n5% no ITC<\/p>\n

or<\/p>\n

18% with ITC<\/td>\n

As shown<\/td>\n<\/tr>\n
59.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nMultimodal goods transport (no air leg)<\/td>\n12%<\/td>\n5% (restricted ITC: only 5% of input services of goods transportation) or 18% with ITC<\/td>\nAs shown<\/td>\n<\/tr>\n
60.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nPassenger transport by motor vehicle (fuel included)<\/td>\n5%<\/p>\n

(restricted ITC)<\/p>\n

OR<\/p>\n

12% with ITC<\/td>\n

5% (restricted ITC)<\/p>\n

OR<\/p>\n

18% with ITC<\/td>\n

As shown<\/td>\n<\/tr>\n
61.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nRenting of a passenger vehicle<\/p>\n

(with operator, fuel included)<\/td>\n

5%<\/p>\n

(restricted ITC)<\/p>\n

OR<\/p>\n

12% with ITC<\/td>\n

5% (restricted ITC)<\/p>\n

OR<\/p>\n

18% with ITC<\/td>\n

As shown<\/td>\n<\/tr>\n
62.\u00a0 <\/strong>\u00a0<\/strong><\/td>\nRenting of goods carriage<\/p>\n

(with operator)<\/td>\n

12%<\/td>\n5%<\/p>\n

(restricted ITC)<\/p>\n

OR<\/p>\n

18% with ITC<\/td>\n

As shown<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Leisure and Gaming <\/strong><\/p>\n\n\n\n\n\n\n
S. No. <\/strong><\/td>\nItem \/ Service<\/strong><\/td>\nOld Rate<\/strong><\/td>\nNew Rate<\/strong><\/td>\n<\/tr>\n
1.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nAerated & caffeinated drinks; other non-alcoholic beverages; all flavoured sugar-added drinks<\/td>\n28%<\/td>\n40%<\/td>\n<\/tr>\n
2.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nLuxury automobiles (>1200cc and >4,000mm), motorcycles >350cc, yachts, personal-use aircraft, racing cars<\/td>\n28% plus cess in the old regime<\/td>\n40%<\/td>\n<\/tr>\n
3.\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0<\/strong><\/td>\nCasinos, gambling, horse racing, online money gaming, IPL tickets, and race club licensing<\/td>\n28%<\/td>\n40%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Important Points<\/h2>\n