GST bachat math: Exact savings for middle class on daily items under new reforms

The new GST reforms, dubbed the "GST bachat utsav" by the government, came into force on September 22 — the auspicious first day of Navratri — with a promise to bring cheer to the middle class due to higher savings on everyday items.

From vehicles and daily groceries to medicines and school supplies, the reductions are expected to lower monthly household expenses and support broader affordability for the middle-class and neo-middle-class households.

In his address to the nation on Sunday, PM Modi said that the country is going to take an important and big step for Atmanirbhar Bharat on the first day of Navratri. "With the sunrise tomorrow, the next generation GST reforms will come into effect. A 'GST bachat utsav (savings festival)' will begin tomorrow. You will be able to buy things you like more easily. The poor, middle class, neo middle class, youths, farmers, women, traders and shopkeepers will benefit from this," he said.

From September 22, the GST will now be a two-tier structure wherein the majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.

Affordable vehicles

GST on two-wheelers, small cars, and three-wheelers has been cut from 28% to 18%, while bicycles now attract just 5% instead of 12%.

Officials estimate that a two-wheeler worth Rs 1 lakh will be cheaper by about Rs 10,000, while small cars in the Rs 6–8 lakh range may cost Rs 60,000–80,000 less.

Auto-rickshaw buyers could save around Rs 30,000 on a Rs 3 lakh purchase. With 2.66 lakh autos sold in 2024 — nearly 40% of total sales — the relief is expected to reach large sections of workers and families. Auto parts have also seen a GST cut to 18% from 28%, lowering long-term maintenance costs.

Daily essentials and household goods

Basic items such as soaps, toothpaste, shampoo, hair oiland tooth powder now fall under the 5% GST slab. Diapers, baby bottles, kitchen utensils, sewing machines, matches and candles are also cheaper from today. For a middle-class family, this translates into savings of about Rs 500 on a monthly grocery and toiletries bill of Rs 5,000.

Food and beverages

GST has been scrapped on paneer, UHT milk and packed parottas, while other staples such as butter, ghee, cheese, chocolates, biscuits, namkeen, pasta, noodles and juices now attract just 5%.

This means that a family spending Rs 8,000–10,000 per month on groceries could save Rs 800–1,000, or over Rs 10,000 annually. Chocolates and biscuits will be roughly 15% cheaper, while packed tender coconut water will cost Rs 5–6 less per litre.

Education and students

Stationery items including notebooks, maps, pencils, crayons and sharpeners now come under the 0–5% bracket, down from 12%. A school kit that earlier cost Rs 1,000 is estimated to cost Rs 850. With more than 4.3 crore children enrolled in schools across Uttar Pradesh alone, the relief is expected to significantly reduce education costs for families.

Healthcare and insurance

Essential medicines now attract 5% GST, down from 12%. Rare disease and cancer drugs are exempt entirely under the rationalization move.

Diagnostic kits and medical supplies have also moved to the 5% slab. Spectacles are taxed at 5% instead of 18%, while individual health insurance premiums are fully exempt. For patients, this means a saving of Rs 70–100 on a Rs 1,000 medicine bill and Rs 500–1,200 less per month on certain cancer drugs.

Housing and construction

Cement has seen its GST rate cut to 18% from 28%. This reduces expenses for both urban and rural home builders. A Rs 50,000 cement purchase will now save buyers around Rs 5,000. Marble, granite, bamboo, and wood products also fall into lower tax brackets, reducing costs for home interiors.

Electronics and appliances

GST on televisions above 32 inches, air-conditioners, dishwashers and monitors has been reduced from 28% to 18%. A Rs 40,000 TV will be cheaper by about Rs 4,000, while a Rs 35,000 air-conditioner will see a reduction of Rs 3,500. Solar water heaters now attract 5% GST, saving about Rs 7,000 on a Rs 60,000 unit. This will bring cheer to Diwali shoppers, who are looking to make big purchases in the festival season.

Farmers and irrigation

Tractors, tyres, harvesters, and soil-preparation machinery now attract 5% GST, compared to 12–18% earlier. A new tractor costing Rs 6 lakh will be cheaper by approximately Rs 42,000. Sprinklers, drip systems, and pumps are also more affordable, encouraging efficient water use and mechanised farming.

Culture and handicrafts

Toys, board games, brass idols, and handicrafts now face 5% GST instead of 12%. A toy set worth Rs 2,000 will be cheaper by around Rs 150. The cuts are also expected to boost demand for traditional and artisan products.