India rolls out GST 2.0 from September 22, 2025. Check full list of products under 0%, 5%, 18% and 40% GST slabs, and how it affects prices of food, personal care, electronics, automobiles, and luxury goods.
India’s Goods and Services Tax (GST) regime has undergone its most significant reform since 2017. The GST Council, chaired by Finance Minister Nirmala Sitharaman, has approved a new two-slab structure—5% and 18%—along with a zero slab for essentials and a 40% slab for sin and luxury goods. Popularly called “GST 2.0”, this overhaul will come into effect from September 22, 2025.
The move aims to simplify taxation, boost consumption, and provide relief to households ahead of the festive season, while ensuring higher duties on harmful and ultra-luxury products.
GST 2.0: New Structure at a Glance
- 0% (Zero Rate) – Essential food, healthcare, and education.
- 5% Slab – Daily-use goods, FMCG, personal care, agriculture inputs, small vehicles.
- 18% Slab – Consumer durables, electronics, automobiles, construction materials.
- 40% Slab – Tobacco, pan masala, sugary drinks, luxury vehicles, personal aircraft.
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GST 2.0: Detailed Product-Wise Breakdown
0% GST – Essentials and Public Welfare Goods
- Food: UHT milk, paneer, Indian breads (roti, paratha, chapati), fresh fruits, vegetables, jaggery, natural honey, pulses, besan.
- Healthcare: 33 life-saving medicines (including cancer and rare disease drugs), spectacles, vision correction lenses.
- Education: Pencils, crayons, sharpeners, notebooks, lab books, maps, globes, uncoated paper.
- Religious & Cultural: Puja samagri, prasad, handloom items, traditional brooms.
- Services: School and college education, hospital and clinic services.
5% GST – Household and Socially Beneficial Goods
- Personal Care: Shampoo, soaps, toothpaste, hair oil, shaving cream, toothbrushes, talcum powder.
- FMCG & Packaged Food: Namkeens, biscuits, chocolates, noodles, pasta, jams, sauces, butter, ghee, dry fruits, packaged drinking water (20-litre jars).
- Agriculture & Health Equipment: Medical oxygen, anaesthetics, diagnostic kits, glucometers, thermometers, tractors, harvesters, solar water heaters, renewable energy devices.
- Textiles & Crafts: Handicrafts, man-made yarn, rugs, bamboo/cane furniture, marble and granite blocks.
- Transport: Bicycles, motorcycles below 350cc, rickshaws, tractors, trailers.
18% GST – Standard Goods and Durables
- Electronics & Appliances: TVs (all sizes), refrigerators, washing machines, dishwashers, air conditioners, computers, printers, mobile phones.
- Automobiles: Small cars (petrol up to 1200cc, diesel up to 1500cc), motorcycles up to 350cc, three-wheelers, buses, ambulances, trucks.
- Auto Parts: Uniform 18% on all components, from tyres to spare parts.
- Construction & Building: Cement, ready-mix concrete, glass products, some plastic goods.
40% GST – Sin and Luxury Goods
- Tobacco & Products: Cigarettes, gutkha, pan masala, chewing tobacco, beedis.
- Sugary & Aerated Beverages: Soft drinks with added sugar, carbonated fruit beverages, caffeinated energy drinks.
- Luxury Vehicles: High-end cars, motorcycles above 350cc, yachts, helicopters, personal aircraft.
- High-End Electric Vehicles (EVs): Imported luxury EVs priced above ₹40 lakh.
Economic Impact
- Consumers: Relief on daily essentials, packaged food, and personal care products.
- Industry: Boost for auto and electronics sectors with reduced tax burden.
- Inflation: Analysts estimate a decline of up to 1.1% in consumer inflation.
- Government Revenue: Expected short-term loss of ₹48,000 crore, to be balanced by higher duties on sin and luxury items.
GST 2.0: Expert View
Economists call GST 2.0 a “game changer” that balances consumer relief with fiscal responsibility. “A two-slab GST is long overdue. It reduces complexity and helps businesses plan better while making essentials affordable,” said a senior tax analyst at Deloitte India.
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GST 2.0 – New Slabs at a Glance (Effective Sept 22, 2025)
| GST Slab | Category | Examples of Products |
| 0% (Zero Slab) | Essentials | Milk, bread, pulses, fresh fruits & vegetables, jaggery, honey, notebooks, spectacles, life-saving medicines, school & hospital services |
| 5% (Lower Slab) | Daily-use Goods | Shampoo, soaps, toothpaste, biscuits, namkeens, chocolates, packaged food, dry fruits, bicycles, motorcycles <350cc, tractors, renewable energy devices |
| 18% (Standard Slab) | Consumer Durables & Automobiles | TVs, refrigerators, washing machines, mobile phones, small cars (petrol up to 1200cc), motorcycles <350cc, three-wheelers, cement, glass |
| 40% (Luxury & Sin Goods) | Harmful & Ultra-Luxury Items | Cigarettes, gutkha, pan masala, sugary drinks, energy drinks, luxury cars, superbikes >350cc, yachts, helicopters, private jets |
Conclusion
India’s GST 2.0 reform is a landmark in indirect taxation. By simplifying slabs, cutting rates on essentials, and taxing harmful goods heavily, the government hopes to stimulate demand and bring relief to households ahead of Diwali. For businesses, compliance becomes easier, while consumers can expect cheaper FMCG and household goods in the coming weeks.