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The revised rate structure will come into effect on September 22, coinciding with the first day of Navratri
Union Finance Minister Nirmala Sitharaman addresses the media regarding the 56th GST Council meeting, in New Delhi, Wednesday. (PTI photo)
In a major move to simplify India’s tax regime and bring relief to consumers, the GST Council on Wednesday approved a sweeping overhaul of the Goods and Services Tax (GST) structure.
The reforms include slashing tax rates on everyday items, such as TVs, shampoos, air conditioners, medicines, and even small cars, and streamlining the number of GST slabs.
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The revised rate structure will come into effect on September 22, coinciding with the first day of Navratri. The GST Council has replaced the earlier four-tier system (5%, 12%, 18%, and 28%) with a simplified two-rate structure of 5% and 18%. Additionally, a special 40% rate has been introduced for luxury and sin goods like high-end cars and tobacco products.
HERE ARE 10 KEY FAQs TO HELP YOU UNDERSTAND WHAT’S CHANGING
1. When will the changes in GST rates come into force?
The new GST rates will apply from 22nd September 2025 for most goods and services. Items like cigarettes and chewing tobacco will continue with the current rates until a later date, to be notified separately.
2. What is the GST rate on medicines?
All medicines will now attract a 5% GST, unless specifically exempted.
3. What is the GST rate on air conditioners, TVs, monitors, and dishwashers?
GST on air conditioners and dishwashers has been reduced from 28% to 18%. All TVs and monitors, regardless of size, will now be taxed at 18%.
4. Has GST on agricultural machinery/equipment been reduced?
Yes. Items like sprinklers, harvesters, composting machines, and other equipment will now attract 5% GST instead of 12%.
5. What is the revised GST rate on small petrol, LPG, CNG, or diesel cars?
GST on small cars is reduced from 28% to 18%.
“Small cars” include:
- Petrol/LPG/CNG cars with engine capacity up to 1200 cc and length up to 4000 mm
- Diesel cars with engine capacity up to 1500 cc and length up to 4000 mm
6. What is the GST rate on renewable energy equipment/devices?
GST on renewable energy devices has been brought down from 12% to 5%.
7. Why reduce GST on items like face powder and shampoos?
These are commonly used products. Simplifying rates for all brands, including luxury ones, avoids classification issues and reduces tax complexity.
8. What is the GST rate on beauty and physical well-being services?
Services like salons, gyms, yoga centres, and health clubs will now be taxed at 5% without input tax credit (ITC). Earlier, these were taxed at 18%.
9. Are passenger transport services taxed at 18% now?
No. They will be taxed at a 5% merit rate without ITC. However, service providers can opt to charge 18% with full ITC.
10. What is the GST on admission to sporting events?
Entry to recognised sporting events priced below Rs 500 remains exempt. Tickets priced above Rs 500 will attract 18% GST.
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The News Desk is a team of passionate editors and writers who break and analyse the most important events unfolding in India and abroad. From live updates to exclusive reports to in-depth explainers, the Desk d…Read More
The News Desk is a team of passionate editors and writers who break and analyse the most important events unfolding in India and abroad. From live updates to exclusive reports to in-depth explainers, the Desk d… Read More
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