India’s GST Council approves a major overhaul of tax rates on essential goods and services.

By Aniket Chakraborty Sept 4, 2025 Arrow INDIA NEWS Image Credit | @FinMinIndia | X

The new structure limits rates to 5% and 18%, with a special 40% slab for select items.

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Rates on food items like chapati, paneer, and butter cut to nil or 5%.

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Household goods like toothpaste, soap, and utensils now taxed at just 5%.

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Consumer electronics such as air-conditioners and TVs to be taxed at 18%, down from 28%.

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Healthcare products like life-saving drugs and diagnostic kits now taxed at 5%.

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Services like health clubs, fitness centers, and yoga now taxed at 5%.

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Motorcycles up to 350 cc and small hybrid cars benefit from lower GST at 18%.

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Luxury items like aerated drinks, yachts, and racing cars to see 40% GST.

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Tobacco products and certain leisure services like casinos and IPL tickets will also face 40% tax.

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