GST Reforms 2025: What Got Cheaper and What Changed?

The Government of India has announced Next-Gen GST Reforms effective from 20th September 2025, bringing relief to common people and making several everyday products cheaper. These reforms aim to simplify taxation, reduce the burden on essential goods, and make luxury or harmful items more expensive.

In this blog, let us understand what items fall under which GST slab and how it impacts you. 

 40% GST Slab – Luxury & Harmful Products

The government has kept luxury and sin goods in the highest slab to discourage consumption.

• Pan Masala, Aerated beverages with sugar, Caffeinated and Carbonated drinks

• Cigarettes, Cigars, Tobacco products

• Luxury motor cars, Yachts, Motorcycles above 350cc, Hybrid vehicles (high engine capacity)

• Revolvers, Pistols, Smoking Pipes

👉 Impact: These items will remain expensive as they are non-essential and harmful.

18% GST Slab – Consumer Durables & Vehicles

Items of daily lifestyle use and vehicles are in this category.

• Air Conditioners, Dishwashing machines, TVs

• Petrol & Diesel cars (small engine capacity)

• Three-wheeled vehicles, Motorcycles ≤350cc, Ambulances

• Bidis, Non-alcoholic beverages, Vehicle parts & accessories

👉 Impact: Prices remain moderate, but not as heavily taxed as luxury goods.

 5% GST Slab – Daily Essentials Made Cheaper

The biggest relief for common people is the reduction of GST on everyday food and personal care items.

• Bakery items, Chocolates, Cocoa powder

• Coffee extracts, Confectionery, Ice cream

• Hair oil, Shampoo, Toothpaste, Toilet soap

• Soups, Shaving products, Plant-based milk

• Mineral water, Thermometers

• Paneer/Chhena, Pizza bread, Khakhra, Roti

👉 Impact: These were earlier taxed at 18%, now down to 5%, giving big savings for households.

0% GST Slab – Education & Food Relief

To make education and basic needs affordable, the following items are exempted:

• Paratha, Parotta & other Indian breads

• Exercise books, Graph books, Lab notebooks

• Maps, Pencils, Crayons

👉 Impact: Students and families will directly benefit from reduced costs in education-related products.

12% GST Slab – Some Essentials Retained

Some products continue to attract 12% GST, such as:

• Agarbatti, Apparel over ₹2,500

• Condensed milk, Cheese, Dates

• Bandages, Dressings, Corrective spectacles

• Carpets, Bicycles, Coconut water, Coffee

👉 Impact: These are essential but not classified under the lowest slab.

In Short

The GST Reforms 2025 are focused on:
✅ Making essential goods cheaper (from 18% → 5% or 0%)
✅ Keeping luxury & harmful products expensive (28% → 40%)
✅ Supporting education, health, and food affordability

These reforms will directly benefit the common man’s pocket, making monthly expenses on food, personal care, and stationery lighter.

Conclusion:

GST Reforms 2025 mark a positive step towards consumer-friendly taxation. Essentials are cheaper, education is more affordable, while luxury and harmful products are taxed higher. This balance will help the economy and common people alike.