The Goods and Services Tax (GST) Council on Wednesday approved major changes to India’s indirect tax framework, rationalising rates into 5 per cent and 18 per cent slabs.
The decision, effective from September 22, 2025, will make a wide range of daily-use goods more affordable, while luxury and sin goods remain under higher taxation, reported DNA India.
Food and essentials
Ultra-high temperature (UHT) milk will now be tax-free, down from 5 per cent, while butter, ghee, paneer, cheese and condensed milk have been reduced from 12 per cent to 5 per cent or nil in some cases.
Biscuits, chocolates, cocoa products, malt and pasta will shift to 5 per cent. Dry fruits including almonds, pistachios, cashews and dates will also attract 5 per cent instead of 12 per cent.
Ready-to-eat snacks like namkeens and bhujia drop from 18 per cent to 5 per cent. Fertilisers and agricultural inputs have similarly been reduced from 12–18 per cent to 5 per cent.
Healthcare and consumer goods
Life-saving drugs and medical devices will see rates cut to 5 per cent or nil. Mass-use items like footwear, textiles and entry-level electrical appliances will now fall under the 5 per cent or 18 per cent slab, instead of 12–28 per cent.
Sin and luxury items
Products such as pan masala, gutkha, cigarettes, tobacco and premium liquor remain under high GST and compensation cess, with valuation shifted to Retail Sale Price (RSP). Aerated drinks with added sugar will attract a new 40 per cent slab.
An official noted, “This reform balances affordability for households while ensuring high taxation on luxury and harmful goods.”
