The new GST rates, which are a big element of the “Next Gen GST” reforms, come into effect on Monday. Prime Minister Narendra Modi said that these measures, along with earlier modifications to the income tax system, are expected to save Indian citizens over ₹2.5 lakh crore. Modi called the change a “Bachat Utsav,” which means “savings festival.” He said that although income tax cuts mostly helped the middle class, these changes to the GST will help the poor and “neo middle class” save money just in time for the holidays.
Electronics & Appliances for the Home 🏠
A lot of things for the home are now cheaper. Prices for split air conditioners would drop by ₹2,800 to ₹5,900, and prices for window air conditioners will drop by about ₹3,400. The price of dishwashers will go down by up to ₹8,000, which could make more people buy them.
There are also big price drops on big TVs. Models larger than 32 inches will cost between ₹2,500 to ₹85,000 less on premium 100-inch displays.
Daily Hygiene and Personal Care 🧼 Products for daily hygiene and personal care are now cheaper. Things like hair oil, soap, shampoo, toothbrushes, and toothpaste are now in the 5% tax range. There have also been big drops in the prices of grooming products like shaving cream and talcum powder, from 18% to 5%. Baby items like diapers and feeding supplies will also be cheaper for young families.
Food & Kitchen Basics 🛒
A lot of different types of food are now cheaper.
Dairy products: costs for ghee are likely to drop by ₹40–70 per liter, and costs for butter and paneer will also go down.
Namkeen, instant noodles, chocolates, jams, ketchup, and sauces are now all taxed at 5% GST.
Drinks: Fruit juices, coffee, and bottled water will be cheaper, but carbonated drinks will still be taxed more.
Ultra-high temperature milk, prepackaged paneer, and all Indian breads, such as chapati, roti, and parantha, are now fully free of GST.
Health and Wellness 💊
There have been some of the biggest changes in this area.
Medicines: There are currently 33 lifesaving treatments and three cancer and rare disease drugs that are fully tax-free. The tax on all other drugs has gone down from 12% to 5%.
Glucometers, diagnostic kits, and other surgical tools are cheaper now.
Wellness services: The number of people who use gyms, salons, and spas has gone down from 18% to 5%.
Insurance: Life and health insurance policies are now totally tax-free, which saves a lot of money.
Cars & Transportation 🚗
The car industry has been fundamentally changed.
Two-wheelers and small cars: The tax rate for cars with engines up to 350cc has gone down from 28% to 18%. This lowers the price of 98% of India’s two-wheeler market by ₹5,600 to ₹18,800.
Entry-level cars: Budget-friendly hatchbacks will be ₹40,000 to ₹75,000 cheaper, and compact SUVs will be ₹85,000 cheaper.
Luxury SUVs would see huge price drops of between ₹1.8 lakh to ₹4.48 lakh for premium vehicles.
Buses, trucks, and ambulances are now cheaper for businesses.
Building, farming, and more 👷♂️
Cement costs will go down as the tax goes from 28% to 18%.
Farm tools: Tractors and other farm machines will cost less.
Hotel rooms: Rooms that cost ₹7,500 or less per night will have their taxes cut from 12% to 5%.
No more taxes on exercise books, pencils, and sharpeners for students.
The new GST system is projected to increase spending in all areas and give millions of families a lot of relief.