GST Rate Changes

On 22 September 2025, the GST Council implemented a landmark overhaul of the Indian Goods & Services Tax (GST) regime—marking the most significant rate rationalization since GST’s inception.

The multi-slab structure (5 %, 12 %, 18 %, 28 %) has been largely replaced by two core rates: 5% and 18% for most goods and services.
A new 40% rate has been introduced for luxury and “sin” goods—such as premium vehicles, pan-masala, and certain carbonated beverages.

Many everyday items have seen dramatic rate reductions—e.g., toiletries, dairy products and household goods that were taxed at 18 % or 12 % are now at 5 % or lower.
Luxury and sin-goods manufacturers will see higher tax incidence due to the 40 % slab, requiring careful pricing and margin review.
Below are some of the major rate changes but is not exhaustive in nature.

Disclaimer: This blog is for general information only and not exhaustive. Before taking any decision based on these changes, you should seek professional advice from a qualified Chartered Accountant.