Big Diwali Dhamaka! GST Council Approves Dual Tax Rates Of 5% & 18%; Full List Of Items To Get Cheaper

In a major good news, the GST council, chaired by Finance Minister Nirmala Sitharaman, has approved dual tax rates under the goods and services tax regime. The council, which held its 56th annual general meeting, reduced the GST slabs to just 5% and 18%, while scrapped 12% and 28% tax rates. These new rates will come into effect from September 22, 2025.

The press conference by FM Sitharaman kicked off at 10:00 PM on September 3, 2025. Watch Here

The latest GST revamp is going to spur consumption demand and give a major boost to the common man, right from farmers to enterprises, from households to businesses. The Prime Minister Narendra Modi-led government said, This GST rationalisation is a historic Diwali gift for the nation."

"The next generation of GST reforms is a gift for every Indian this Diwali. Taxes for the general public will be reduced substantially. Our MSMEs and small entrepreneurs will get huge benefits," PM Modi said.

He added, "Everyday items will become cheaper and this will also give a new boost to the economy."

Meanwhile, Finance Minister Nirmala Sitharaman said, "This reform is not just on rationalising rates, it's also on structural reforms, ease of living, so that businesses can work together with great ease. We have corrected inverted duty structure problems, we have resolved classification related issues, and we have ensured there will be stability and predictability about the GST Reforms."

Check the Full List Of Items To Get Cheaper From September 22:

Big Savings In Essential Items:

1. From 18% to 5%:

Hair Oil, Shampoo, Toothpaste, Toilet Soap Bar, Tooth Brushes, and Shaving Cream.

2. From 12% to 5%:

Items that will see major cuts in GST rates are: butter, ghee, cheese, dairy spreads, pre-packed namkeens, bhujia, mixtures, utensils, feeding bottles, napkins for babies, clinical diapers, and sewing machines & parts.

Mega Boost In the Agriculture Sector

1. From 18% to 5%:

Items like tractor tyres and parts, which currently have 18% GST rate, will be part of 5% GST slab from September 22 onward. This is not just a big boost for agriculture and farmers, but also for automobile companies.

2. From 12% to 5%

Currently, items like tractors, specified bio-pesticides, micro-nutrients, drip irrigation systems and sprinklers. Also, agricultural, horticultural or forestry machines for soil preparation, cultivation, harvesting and threshing are part of the 12% GST rate. From September 22nd, these items will be under the 5% slab.

3. Healthcare Sector To Thrive:

1. From 18% to 0%

The GST council has exempted individual health and life insurance products from GST rates. Currently, these items fall under the 18% GST rate.

2. From 18% to 5%

The thermometer, which currently has an 18% GST rate, will fall under the 5% slab.

3. From 12% to 5%

Items like medical-grade oxygen, all diagnostic kits & reagents, glucometers & test strips, and corrective spectacles --- will see a lower GST rate of 5% --- from 12%.

Automobile Prices May Fall!

1. From 28% to 18%

One of the biggest announcements is in the automobile sector. Small cars and two-wheelers, which are part of the 28% GST rate, will see a massive 10% cut and be part of the 18% GST slab.

These items are- petrol and petrol hybrid, LPG, CNG cars ( not exceeding - 1200 cc & 4000 mm); followed by diesel & diesel hybrid cars (not exceeding - 1500 cc & 4000 mm). Also, items like 3-wheeled vehicles, motorcycles (350cc & below), and motor vehicles for the transport of goods will be part of this new revamp.

Bonanza On Electronic Appliances:

1. From 28% to 18% GST Rate:

Another major GST revamp is seen in electronic appliances. Items like air conditioners, television (above 32, including LED & LCD TVs), monitors & projectors, and lastly dish washing machines that are currently under the 28% GST rate will become cheaper after September 22. The new GST rate will be 18% on these items.

Education To Become Affordable:

1. From 12% to 0% GST Rate

Items like maps, charts, globes, pencils, sharpeners, crayons and pastels are exempt from the GST rate from the current 12%. This means there will be zero GST applied on these products from September 22.

2. From 5% to NIL:

Also, erases are exempted from GST with effect from September 22nd, compared to current 5% rate.