GST 2.0 comes into effect: Major overhaul to boost nationwide consumption | All you need to know

GST 2.0 comes into effect: Major overhaul to boost nationwide consumption | All you need to know


Prices of daily essentials, food products, kitchen staples, electronics, medicines, medical equipment, and even automobiles will get cheaper from today as the reduced GST rates on about 375 items come into effect.

New Delhi:

The new GST rates come into effect from today (September 22), a move that Prime Minister Narendra Modi said will accelerate India’s growth, as he highlighted the importance of making the country ‘atmanirbhar’. Under next-generation GST reforms, prices of several items and products, including electronics, food, and automobiles, have been reduced.

As part of the GST reform, the government has now introduced only two GST slabsโ€”5% and 18%โ€”instead of four. A separate 40% tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.ย Till now, Goods and Services Tax (GST) was levied in 4 slabs of 5, 12, 18, and 28 per cent. Besides, a compensation cess is levied on luxury items and demerit or sin goods.

Direct relief to the middle classย ย 

Essential goods like food grains, medicines, and everyday items will continue to be taxed at a lower rate of 5%, ensuring affordability for families. Meanwhile, the removal of the 12% tax rate has made many mid-range products cheaper, providing direct relief to middle-class families.ย 

Finance Minister Nirmala Sitharaman believes that the new GST reforms implemented by the government will significantly reduce the tax burden. It is estimated that this will result in savings of approximately Rs 2 lakh crore for the country’s citizens.

Food and beverages become cheaper

Now, everyday food items like milk-based beverages, biscuits, butter, cereals, dried fruits, fruit juices, ghee, ice cream, jam, ketchup, snacks, cheese, pastries, sausages, and coconut water will be taxed at a lower GST rate than before. This will reduce the common man’s kitchen expenses.

Daily use items like shampoo, soap, hair oil, shaving cream, talcum powder, and face cream will now be cheaper due to reduced taxes on them.

Reduction in the prices of electronic devices

Electronic items like ACs, washing machines, TVs, and dishwashers will also be available at affordable prices. The tax on these products has been reduced due to the new GST rates.

The government has reduced the GST rate on several essential medicines and medical devices to just 5%. Pharmaceutical companies have been directed to revise their MRPs (Maximum Retail Prices) and pass on the full benefit to consumers.

Salons, barbershops, gyms, fitness centers, and yoga services will now also be charged lower GST. This will ease the burden on those using these services.

Full list of items that have gotten cheaper


































































































Food and Kitchen
S.No Item Old GST Rate New GST Rate
1. Paneer/Chhena (Packed) 5% 0%
2. UHT Milk (Tetra-Pack Milk) 5% 0%
3. Parathas and Indian Rotis (all names)ย  18% 0%
4. RoG/ChapaG/Khakhra, Pizza Bread 5% 0%
5. Butter/Ghee/Dairy Spreads 12% 5%
6. Cheese/Paneer 12% 5%
7. Dry Fruits (Almonds, Pistachios, Hazelnuts, Dates, Figs, etc.) 12% 5%
8. Chocolates, Pastries, Cakes, Biscuits, Jams 18% 5%
9. Namkeen/Bhujiya/Mixture/Chabena (Packed) 12% 5%
10. Pasta/Spaghetti/Macaroni/Noodlesย  12% 5%
11. Corn Flakes and Other Cereal Flakes 18% 5%
12. Pickles 12% 5%
13. Fruit and vegetable juices 12% 5%
14. Coconut water (packaged) 12% 5%
15. Refined sugar and sugar cubes 12% 5%
16. Coffee 18% 5%
17. Curry paste, mayonnaise, salad dressings 12% 5%
18. Soups and broths (prepared/pre-mixed) 18% 5%
19. Yeast and baking powder 12% 5%
20. Preserved fish/meat (canned/prepared) 12% 5%
Beverages (non-alcoholic)
21. 20-liter drinking water jars 12% 5%
22. Plant-based milk beverages (coconut milk, almond milk, cashew milk, flax milk, rice milk, and oat milk) 18% 5%
23. Fruit pulp/fruit juice-based beverages (non-carbonated) 12% 5%
24. Milk-based beverages (milk-based drinks) 12% 5%
Personal Care (Daily Use)
25. Toilet soap (bar/cake), toothpaste, dental floss, toothbrush 18% 5%
26. Tooth powder 12% 5%
27. Hair oil and shampoo, talcum powder/face powder, shaving cream/aftershave/logo 18% 5%
28 Combs, hairpins, curlers (non-electric) 12% 5%
Household items
29. Feeding bottles and nipples, baby napkins, and diapers (all types) 12% 5%
30. Safety matches 12% 5%
31. Candles/handmade candles 12% 5%
32. Kitchen utensils (steel/aluminum/copper/brass/wood) 12% 5%
33. Kerosene/wood stoves (non-electric) 12% 5%
34. Sewing machines and parts 12% 5%
35. Rubber bands 12% 5%
Students and education
36. Exercise/Graph/Laboratory Notebook 12% 0%
37. Eraser 12% 0%
38. Textbook/Notebook Paper (Uncoated) 12% 0%
39. Maps/Atlases/Globes (Printed) 12% 0%
40. Pencils, Crayons, Pastels, Charcoal 12% 0%
41. Pencil Sharpener 12% 0%
42. Geometry/Color Box 12% 5%
43. Paper Boxes/Boxes (Corrugated/Other) 12% 5%
44. Paper Tray 12% 5%
Medicines and medical devices
45. Medicines for various rare diseases and cancer 5โ€“12% 0%
46. All (other) medicines and drugs (including Ayurveda, Unani, Siddha, and homeopathy) 12% 5%
47. Medical oxygen 12% 5%
48. Diagnostic kits and diagnostic reagents (chemicals), glucometers and test strips 12% 5%
49. Thermometers (medical) 18% 5%
50. Medical/surgical instruments, surgical rubber gloves 12% 5%
Farmers and irrigation
51. Tractors (excluding road tractors for semi-trailers with engine capacity exceeding 1800 cc) 12% 5%
52. Tractor tires/tubes 18% 5%
53. Tractor parts (brakes, gearboxes, clutches, wheels, steering, radiators, silencers, hydraulics, fenders/hoods, etc.) 18% 5%
54. Harvesters/threshers and parts 12% 5%
55. Soil preparation and wagon machinery 12% 5%
56. Poultry/beekeeping machinery 12% 5%
57. Sprinklers/drip irrigation and nozzles 12% 5%
58. Hand pumps (other) 12% 5%
59. Composing machines 12% 5%
Vehicles and mobility
60. Two-wheelers (bikes/scooters โ‰ค350cc) 28% 18%
61. Small cars (โ‰ค1200cc petrol / โ‰ค1500cc diesel; โ‰ค4m) 28% 18%
62. Tri-wheelers (automobiles) 28% 18%
63. Passenger vehicles (10+ seats) 28% 18%
64. Engine parts, ignitions, pumps (vehicles) 28% 18%
65. Bicycles and bicycle parts 12% 5%
66. Auto parts 28% 18%
Construction materials
67. Cement 28% 18%
68. Marble/Travegrain Blocks, Granite Blocks, Sand-Lime Bricks 12% 5%
69. Parcel Boards Made from Agricultural Waste (Bagasse, Rice Husk, Jute, Sisal, etc.) 12% 5%
70. Bamboo Flooring/Carpentry Room 12% 5%
71. Packing Cases and Pallets (Wood) 12% 5%
Consumer Electronics and Appliances
72. Television Sets (LCD/LED) (>32′) 28% 18%
73. Monitors and Projectors (Non-TV) 28% 18%
74. Air Conditioners 28% 18%
75. Dishwashers 28% 18%
76. Solar Water Heaters and Systems, Solar Cookers 12% 5%
Toys, Games, and Handicrafts
77. Toys such as tricycles, scooters, pedal cars, etc. (including their parts and accessories) [other than electronic toys] 12% 5%
78. Wooden/metal/textile dolls and toys (Channapatna, Thanjavur, Sawantwadi, etc.) 12% 5%
79. Board games (Ludo/Carrom/Chess/Playing Cards) 12% 5%
80. Sports equipment other than items and equipment for general physical exercise 12% 5%
81. Handicrafts: Sculptures and statues (wood/stone/metal) and lamps (including Panchaloga) 12% 5%
82. Brass/copper/aluminum artifacts 12% 5%
83. Paintings, sculptures 12% 5%

These items have become more expensive

The government has imposed a higher GST rate of 40 percent on luxury and harmful goods such as pan masala, tobacco, aerated drinks, expensive cars, yachts, and private planes. These items have been classified as “sin goods” and luxury goods, with higher taxes being imposed to curb their consumption.

Also Read:ย GST 2.0 to take effect from today: Full list of what gets cheaper

Also Read:ย ‘GST Bachat Utsav’ to benefit all sections: Top quotes from PM Modi’s address to nation



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