The GST slabs have received a lot of backlash previously, while various traders were also troubled due to this tax. Earlier, there were four GST slabs- 5%, 12%, 18% and 28%, but the government has now decided to provide a huge relief to Indians ahead of Diwali.
Hon’ble Prime Minister Shri @narendramodi announced the Next-Generation GST Reforms in his Independence Day address from the ramparts of Red Fort.
Working on the same principle, the GST Council has approved significant reforms today.
These reforms have a multi-sectoral and… pic.twitter.com/NzvvVScKCF
— Nirmala Sitharaman Office (@nsitharamanoffc) September 3, 2025
The next-gen GST reforms now include only two slabs- 5% and 18% and a few other reliefs. The new structure will come into effect from 22 September. These reforms are said to have a multi-sectoral and multi-thematic focus, aimed at ensuring ease of living for all citizens and ease of doing business for all.
Next-gen GST Reforms
Individual life and health insurance policies (earlier 18% tax), including family floater, 33 life-saving drugs, including anti-cancer medicines, and items like maps, charts, globes, pencils, sharpeners, crayons, pastels, exercise books, notebooks, and erasers (earlier 12% tax), will no longer be taxed.
Daily essentials like hair oil, shampoo, toothpaste, toilet soap bar, tooth brushes, shaving cream, butter, ghee, cheese, dairy spreads (earlier 18% tax), pre-packaged namkeens, bhujia & mixtures, utensils, feeding bottles, napkins for babies, clinical diapers, and sewing machines & parts (earlier 12% tax) now come under 5% tax slab.
Healthcare items like a thermometer (earlier 18% tax), medical grade oxygen, all diagnostic kits & reagents, glucometer & test strips, and corrective spectacles (earlier 12% tax), also come under 5% tax slab now. For farmers & agriculture benefits- tractor tyres & parts that had 18% tax, will now be taxed 5%, tractors, specified bio-pesticides, micro-nutrients, drip irrigation system & sprinklers, agricultural, horticultural or forestry machines for soil preparation, cultivation, harvesting & threshing have come down from 12% to 5%.
Petrol & Petrol Hybrid, LPG, CNG Cars (not exceeding 1200 cc & 4000mm), Diesel & Diesel Hybrid cars (not exceeding 1500 cc & 4000mm), 3-wheeled vehicles, motor cycles (350 cc & below), motor vehicles for transport of goods have come down from 28% to 18%.
Electronic appliances like Air Conditioners, televisions (above 32-inch, including LED & LCD TVs), monitors & projectors, and dishwashing machines have also come down from 28% to 18%. Apart from this, a special 40% slab is also proposed for a select few items such as high-end cars, tobacco, and cigarettes.
