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GST, or Goods and Services Tax, is a part of nearly everything we purchase or use — from daily groceries to monthly mobile bills. It directly impacts our expenses. In September 2025, the Government of India rolled out a major reform called the Next-Gen GST. This new GST rate structure is designed to ease the burden on the common man by lowering tax rates while simplifying the system for both consumers and businesses.

0% GST (Nil Rate – Essentials)

No GST applied on basic needs, education, and certain healthcare.

Category	Items Included
Dairy & Food	UHT milk, chhena (paneer), roti, khakhra, pizza bread
Education	Educational erasers
Insurance	Life, health, and general insurance
Medicines	Specified life-saving drugs

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5% GST (Daily Use & Merit Goods)

Affordable slab for household essentials, small goods, and budget services.

Category	Items Included
Food & Beverages	Milk products, nuts, chocolates, biscuits, confectionery, sugar-based items, soya/plant-based milk, sauces, soups
Household & Utensils	Basic utensils, bamboo furniture, handicrafts, wooden/ceramic/metalware
Stationery & Personal Care	Stationery items, toiletries
Clothing & Footwear	Shoes under ₹2,500
Entertainment & Fitness	Musical instruments, toys, small appliances, gym & yoga services
Hospitality & Travel	Hotel rooms up to ₹7,500 per night, cinema tickets under ₹100
Others	Labeled “merit goods” in food/drink category

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18% GST (Standard Rate – General & Consumer Goods)

Most consumer goods, services, and vehicles fall under this bracket.

Category	Items Included
Electronics & Appliances	TVs, ACs, washing machines, refrigerators, other large appliances
Vehicles	Small cars, motorcycles up to 350cc, buses, three-wheelers
Construction	Cement, coal
Auto Parts	Auto components & spare parts
Premium Consumer Goods	SUVs, bigger vehicles, and other premium categories

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40% GST (Sin & Luxury Goods)

Highest slab for luxury and non-essential/sin goods.

Category	Items Included
Tobacco & Related Products	Cigars, cigarettes, gutkha, bidis
Luxury Beverages	Carbonated & caffeinated drinks
Luxury Vehicles & Travel	Luxury cars, private jets, helicopters, yachts
Leisure & Gambling	Casinos and related services

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Comparison

Summary of GST Reform (2025)

• Old Slabs (5%, 12%, 18%, 28%) → New Simplified Slabs (0%, 5%, 18%, 40%)
  
• Essentials made tax-free to provide relief to the middle class.
  
• Everyday goods moved to 5% GST for affordability.
  
• Most other goods/services standardized at 18% GST.
  
• 40% GST continues as a deterrent on luxury & sin goods.
  

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