September 4, 2025

Hold on tight! India's GST Council just dropped a bombshell by slashing GST rates on a bunch of common use items and vehicles. From hair oil to corn flakes, TVs, and even personal health and life insurance policies, many goods and services now enjoy lower taxes starting September 22, the first day of Navaratri. The Council cut down GST slabs to just two: 5% and 18%. This smart move aims to spark domestic spending and soften the hit from US tariffs. Wondering when the new rates kick in? These GST changes come into force on September 22, 2025 — except cigarettes and some tobacco products which are excluded. No changes were made to the registration threshold under the GST rules. If you supplied goods before the rate change but issued the invoice after, the time of tax payment depends on when you received the payment—before or after the new rates. Medicines are mostly taxed at a cool 5%, except those already exempt. All medical devices used in surgery, dental, or veterinary care also carry this rate, making health equipment more affordable. Car lovers, listen up! Small petrol, LPG, and CNG cars (up to 1200 cc and 4000 mm length) now have GST cut from 28% to 18%. Diesel small cars (up to 1500 cc) got the same benefit. Mid-size and large cars, including SUVs, now face a 40% GST rate without any extra cess—down from a combined tax that went up to 50%! Three-wheelers and buses designed to carry ten or more passengers have their GST reduced from 28% to 18%. Goods carriers like trucks also get a break with 18% GST, down from 28%. Motorcycles up to 350 cc attract 18%, whereas bigger bikes have a 40% rate. Daily essentials also see tax relief. Toilet soap bars now attract just 5% GST to ease expenses for the lower middle class. Face powders and shampoos are taxed lower too. While luxury brands will benefit, this move is to keep the tax system simple and smooth. Why no GST cut on mouthwash? The Council decided to keep GST on toothpaste, toothbrush, and dental floss at 5% because they are basic dental hygiene goods. Coal’s GST rate was merged with its compensation cess to avoid extra burden. Spectacles for vision correction are now under 5% GST, down from 12% and 18%. Air travel taxes depend on class: economy gets 5%, others 18%. Beauty and wellness services like salons, fitness centers, yoga, and health clubs now sport a 5% GST without credit, down from 18%, making self-care more affordable. But beware, if you love lottery or gambling, the GST hits hard at 40%! With these changes, the GST Council has turned the tax game upside down, helping your wallet yet simplifying the tangled GST web. So this Navaratri, get ready to shop smart and save big!

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Tags: Gst rate cut, Gst council, Tax overhaul, Small cars gst, Health insurance gst, Vehicle tax rates,