From September 22, 2025, the government’s revamped Goods and Services Tax (GST) regime, dubbed Next-Generation GST or the GST Bachat Utsav, comes into force. Finance Minister Nirmala Sitharaman has said the overhaul will inject Rs 2 lakh crore into the economy by putting more cash in consumers’ hands.
The rejig slashes rates on essential goods and medicines, moves over 50 items to the zero tax (Nil GST) bracket, and cuts levies on cement, electronics and services. At the same time, it merges cess with GST to impose a 40 percent rate on luxury and sin goods like tobacco, aerated drinks and large cars.
NIL GST Items
| Category | Items |
| Dairy & Bakery | Ultra-High Temperature (UHT) milk; Chena or paneer (pre-packaged & labelled); Pizza bread; Khakhra, chapathi or roti; Paratha, parotta and other Indian breads |
| Medicines & Drugs | Agalsidase Beta; Imiglucerase; Eptacog alfa (Factor VIIa); Onasemnogene abeparvovec; Asciminib; Mepolizumab; Pegylated Liposomal Irinotecan; Daratumumab & subcutaneous; Teclistamab; Amivantamab; Alectinib; Risdiplam; Obinutuzumab; Polatuzumab vedotin; Entrectinib; Atezolizumab; Spesolimab; Velaglucerase Alpha; Agalsidase Alfa; Rurioctocog Alpha Pegol; Idursulphatase; Alglucosidase Alfa; Laronidase; Olipudase Alfa; Tepotinib; Avelumab; Emicizumab; Belumosudil; Miglustat; Velmanase Alfa; Alirocumab; Evolocumab; Cystamine Bitartrate; CI-Inhibitor injection; Inclisiran |
| Stationery | Erasers; Pencil sharpeners |
| Paper & Books | Uncoated paper & paperboard (for exercise/graph/lab notebooks); Exercise books, graph books, laboratory notebooks; Maps, atlases, wall maps, topographical plans, globes (printed) |
Daily essentials
UHT milk, pre-packaged paneer and chena
All Indian breads (chapati, roti, paratha, parotta, khakhra, pizza bread)
Lifesaving medicines
33 drugs and therapies, including those for cancer and rare diseases (Agalsidase Beta, Imiglucerase, Eptacog alfa, Daratumumab, Onasemnogene abeparvovec, Risdiplam, among others)
Many medicines earlier taxed at 12 percent will now attract Nil GST
5% GST Items
| Category | Examples |
| Dairy Products | Condensed milk; butter, ghee, dairy oils, dairy spreads; cheese |
| Nuts & Fruits | Brazil nuts, almonds, cashews, pistachios, walnuts, hazelnuts, pine nuts, chestnuts |
| Dates, figs, pineapples, avocados, guavas, mangoes (dried) | |
| Citrus fruits (oranges, lemons, limes, mandarins, grapefruit – dried) | |
| Other dried fruits, nut/fruit mixtures | |
| Vegetables & Preserves | Mushrooms, truffles, tomatoes preserved; frozen or processed vegetables; jams, jellies, marmalades, fruit pastes; fruit/vegetable squash |
| Cereals & Foods | Malt, starch, inulin; pasta, noodles, couscous; corn flakes, bulgur wheat; fortified rice |
| Pastries, biscuits, cakes (not bread, roti, khakhra); ice cream, chocolates, confectionery | |
| Namkeens, bhujia, mixture, chabena (packaged); diabetic foods | |
| Soups, sauces, condiments, curry paste, mayonnaise, salad dressings | |
| Meat & Fish | Live horses; prepared/preserved meat & sausages; preserved fish, caviar, crustaceans, molluscs |
| Animal Fats & Oils | Lard, tallow, margarine, animal/marine fats & oils; lanolin (wool grease) |
| Beverages | Tea & coffee extracts, chicory; tender coconut water (packaged); soya/fruit/plant-based milk drinks; mineral/aerated water (not flavoured) |
| Medicines & Health | Allopathic, Ayurvedic, Unani, Homeopathic medicines; antisera, vaccines, diagnostic kits |
| Surgical goods: dressings, bandages, surgical gloves; medical oxygen, hydrogen peroxide (medicinal) | |
| Bio-pesticides, toxins, cultures | |
| Personal Care | Talcum/face powder, hair oil, shampoo; shaving cream/lotion, aftershave |
| Toilet soap (bars); toothpaste, tooth powder, dental floss | |
| Candles, handcrafted candles; feeding bottles & nipples | |
| Industrial & Chemicals | Acids (sulphuric, nitric), iodine, ammonia, anaesthetics; menthol & peppermint oil |
| Fertiliser micronutrients, gibberellic acid; silicon wafers; photographic plates/films for medical use | |
| Leather & Handicrafts | Tanned leather (bovine, goat, sheep, etc.); chamois/patent leather; handbags (cotton, jute, leather), purses, jewellery boxes |
| Wooden frames, idols/statues (wood, stone, marble, metals except precious metals); handicraft artware | |
| Wood & Articles | Particle boards (jute, rice husk, bagasse, etc.); bamboo flooring; packing cases, pallets, drums |
| Wooden furniture articles, carvings, marquetry; cork articles (stoppers, shuttlecock bases, artware) | |
| Paper & Packaging | Handmade paper; cartons, boxes (corrugated/non); paper bags, biodegradable bags; moulded trays, stationery sets |
| Pulp (wood, chemical, mechanical, recycled) | |
| Other Goods | Tractor tyres & tubes; sports gloves; idols; drinking water in 20L bottles; rubber bands |
Erasers, pencils, sharpeners, crayons, chalk, charcoals
Notebooks, graph books, maps, atlases, globes
Other consumer items
Butter, biscuits, namkeen, jams, ketchup, juices, dry fruits, ghee, ice cream, pastry and sausages
Toiletries like soaps, shampoos, hair oil, face creams, shaving cream
Kitchen appliances and electronics like ACs, TVs, washing machines, dishwashers (moved to 18 percent from 28 percent)
Medical devices such as diagnostic kits and glucometers (down to 5 percent)
Cement for housing (down from 28 percent to 18 percent)
18% GST Items
| Item Description |
| Bidis* |
| Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers |
| Coal; briquettes, ovoids and similar solid fuels manufactured from coal |
| Lignite, whether or not agglomerated, excluding jet |
| Peat (including peat litter), whether or not agglomerated |
| Goods made from other than natural menthol, namely: Menthol and menthol crystals, Peppermint (Mentha oil), Fractionated/ de-terpinated mentha oil (DTMO), De-mentholised oil (DMO), Spearmint oil, Mentha piperita oil |
| Odoriferous preparations which operate by burning (other than agarbattis, lobhan, dhoop batti, dhoop, sambhrani) |
| Biodiesel (other than biodiesel supplied to Oil Marketing Companies for blending with High Speed Diesel) |
| New pneumatic tyres, of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three wheeled powered cycle rickshaws; rear tractor tyres; and of a kind used on aircraft] |
| Chemical wood pulp, dissolving grades |
| Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch-cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803; [other than Uncoated paper and paperboard for exercise book, graph book, laboratory notebook and notebooks] |
| Uncoated kraft paper and paperboard, in rolls or sheets, other than that of heading 4802 or 4803 |
| Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note 3 to this Chapter |
| Greaseproof papers; Glassine papers |
| Composite paper and paperboard (made by sticking flat layers of paper or paperboard together with an adhesive), not surface-coated or impregnated, whether or not internally reinforced, in rolls or sheets |
| Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets of any size |
| Paper and paperboard, corrugated (with or without glued flat surface sheets), creped, crinkled, embossed or perforated, in rolls or sheets, other than paper of the kind described in heading 4803 |
| Articles of apparel and clothing accessories, knitted or crocheted, of sale value exceeding Rs 2500 per piece |
| Articles of apparel and clothing accessories, not knitted or crocheted, of sale value exceeding Rs 2500 per piece |
| Made up textile articles, sets of sale value exceeding Rs. 2500 per piece [other than Worn clothing and other worn articles; rags] |
| Spark-ignition reciprocating or rotary internal combustion piston engine [other than aircraft engines] |
| Compression-ignition internal combustion piston engines (diesel or semi-diesel engines) |
| Parts suitable for use solely or principally with the engines of heading 8407 or 8408 |
| Pumps for dispensing fuel or lubricants of the type used in filling stations or garages [8413 11], Fuel, lubricating or cooling medium pumps for internal combustion piston engines [8413 30] |
| Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated |
| Dish washing machines, household [8422 11 00] and other [8422 19 00] |
Services
Haircuts, salon services, yoga centres, gyms and health clubs now attract lower GST rates.
What gets costlier under GST 2.0
Sin goods at 40 percent GST
Cigarettes, bidis, pan masala, gutka, chewing tobacco, reconstituted tobacco products
Online gaming and betting
Luxury vehicles
SUVs/MPVs above 1,200 cc (petrol) or 1,500 cc (diesel) and longer than 4m, now taxed at 40 percent (earlier 28 percent + 22 percent cess). Net impact: slightly lower, but still in top bracket
Motorcycles above 350 cc, 40 percent GST (up from 28 percent + 3 percent cess)
Soft drinks and aerated beverages
Coca-Cola, Pepsi, Mountain Dew, Fanta and other carbonated drinks, now at 40 percent (earlier 28 percent)
18 percent slab items
Restaurant dining at AC/premium outlets
Premium smartphones and imported gadgets
Consumer durables like fridges, washing machines, air-conditioners (moved down from 28 percent, but still higher than basics)
Beauty and grooming services at premium salons and spas
40% GST Items
| Item Description |
| Pan masala* |
| Unmanufactured tobacco; tobacco refuse [other than tobacco leaves]* |
| Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes* |
| Other manufactured tobacco and manufactured tobacco substitutes; “homogenised” or “reconstituted” tobacco; tobacco extracts and essences* |
| Products containing tobacco or reconstituted tobacco and intended for inhalation without combustion* |
| Products containing tobacco or nicotine substitutes and intended for inhalation without combustion* |
| All goods (including aerated waters), containing added sugar or other sweetening matter or flavoured |
| Other non-alcoholic beverages |
| Caffeinated Beverages |
| Carbonated beverages of fruit drink or carbonated beverages with fruit juice |
| Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars, but excluding the goods mentioned against S. Nos., 533, 534, 535, 536, 537, 538 and 539 of Schedule II |
| Motor vehicles with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion, of engine capacity exceeding 1200cc or of length exceeding 4000 mm |
| Motor vehicles with both compression-ignition internal combustion piston engine [diesel-or semi diesel] and electric motor as motors for propulsion, of engine capacity exceeding 1500 cc or of length exceeding 4000 mm |
| Motorcycles of engine capacity exceeding 350 cc |
| Aircrafts for personal use |
| Yachts and other vessels for pleasure or sports |
| Revolvers and pistols, other than those of heading 9303 or 9304 |
| Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof |
| Specified actionable claim as defined in section 2(102A) of the CGST Act, 2017 means the actionable claim involved in or by way of – betting; casinos; gambling; horse racing; lottery; or online money gaming |
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