GST Rates Revised: 5% and 18% Tax Brackets Approved; Effective Tax Rates from...; List of Items Expected to Drop in Costs

The Indian government, under the leadership of Finance Minister Nirmala Sitharaman, recently chaired a GST council meeting that brought about significant changes to the Goods and Services Tax (GST) system.

The meeting saw the decision to apply GST on gold at a tax rate of 3% starting October 1, 2025. However, it's important to note that the GST on gold was not discussed in this particular meeting.

On the other hand, several food items and household items have seen changes in their GST slabs. Food items such as Namkeen, bhujiya, sauces, pasta, instant noodles, chocolates, coffee, preserved meat, cornflakes, butter, and ghee are now under the 12% or 18% GST slab. Meanwhile, hair oil, toilet soap, soap bars, shampoos, toothbrushes, toothpaste, bicycles, tableware, kitchenware, and other household articles are now under the 5% GST slab.

Notable reductions in GST rates include ultra-high temperature milk, chena, and paneer, which have been reduced from 5% to nil, and all Indian breads will also attract a nil rate. The GST on renewable energy devices and parts, such as biogas plants, windmills, and solar cookers, has been reduced from 12% or 18% to 5%.

Regarding vehicles, the GST on cars has not been specifically mentioned in the changes discussed in the latest GST council meeting.

The meeting also touched upon potential next-generation GST reforms, although specific details were not provided. The latest news includes updates on these GST rates, with changes to slabs and reforms in the GST system.

These changes aim to simplify the GST structure and make it more consumer-friendly, as the government continues to strive for a seamless taxation system in the country.