Big GST Reform: Only Two Slabs Now, Everyday Essentials to Get Cheaper
In a major relief for consumers, the GST Council has approved a historic overhaul of the tax structure.
prativad 
New Delhi. In a major relief for consumers, the GST Council has approved a historic overhaul of the tax structure. Instead of four slabs (5%, 12%, 18%, 28%), there will now be only two main slabs—5% and 18%. Luxury and sin goods will continue to attract a 40% rate. The new structure will be effective from September 22, 2025.
What Gets Cheaper?
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Everyday items like soap, shampoo, toothpaste, and packaged foods will now be taxed at 5% instead of 18%.
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Small cars, televisions, air-conditioners, and dishwashers will move down from 28% to 18%.
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Life and health insurance premiums are fully exempted from GST.
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Several household essentials and consumer goods are now under the lower tax bracket.
Economic Impact
The government may face a revenue loss of about ₹48,000 crore, but economists expect a 1% boost in GDP due to higher consumption.
Market & Reactions
The announcement sparked strong buying in stock markets—auto and FMCG shares jumped between 2% and 6%. Industry leaders welcomed the move, calling it a long-awaited reform. The opposition supported the relief but criticized it as a decision “8 years too late.”
