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New GST Rates Effective from 22 September 2025: Full List of What’s Cheaper and What’s Costlier
Starting 22nd September 2025, GST rates are changing on many goods and services in India. Small cars, medicines, agri equipment, and household items get cheaper, while luxury vehicles and sin goods will now be taxed higher. Here's a simple breakdown of the major changes and what it means for businesses and consumers.
Key Highlights:
- Effective Date: New GST rates apply from 22nd September 2025
- Small Cars: GST cut from 28% to 18%
- Luxury Cars, SUVs, Big Bikes: GST hiked to 40%
- Essentials like Medicines, Medical Devices, Soap, Bikes, Agri Tools: GST reduced to 5%
- UHT Milk & Indian Breads: Now exempt
- Insurance, Renewable Energy, Bicycles: Now under lower GST slabs
- Services like Salons, Fitness Centres, Yoga: GST reduced to 5% without ITC
- No Change: GST threshold for registration remains same
- E-way Bills: No re-generation needed for goods in transit
What’s Cheaper from 22 Sep 2025?
- Small Cars (Petrol/CNG < 1200cc, Diesel < 1500cc): 18%
- Medicines, Medical Devices, Spectacles for vision: 5%
- Toilet soap bars, Face powder, Shampoos, Shaving cream: 5%
- Bicycles and Parts: 5%
- Agri Equipment like Sprinklers, Drip Irrigation: 5%
- All batteries including lithium-ion: 18%
- Plant-based milk drinks, Soya milk drinks: 5%
- Renewable Energy Equipment: 5%
- Hotel stay under ₹7500 per night: 5% (no ITC)
- Salons, Spas, Health Clubs, Yoga Centres: 5% (no ITC)
What’s Costlier?
- Luxury Cars, SUVs, MUVs (over 1500cc or 4000mm): 40%
- Motorcycles over 350cc: 40%
- Carbonated fruit drinks: 40%
- Betting, Gambling, Casinos, Horse Racing, Online Gaming: 40%
- IPL and other non-recognised sporting events: 40%
Key Clarifications:
- Old GST rate applies if supply was before 22 Sep but invoice/payment is after, based on timing rules (Section 14 of CGST Act).
- ITC can be used if accrued before 22 Sep; no reversal needed unless supplies become exempt.
- E-Way Bills don’t need to be cancelled for goods in transit.
- No full GST exemption on agri tools/tractors to avoid hurting Indian manufacturers.
- Health & Life Insurance Policies are now GST-exempt.
(Source-pib)
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