GST New Rates: What Gets Cheaper and What Turns Costlier
Update: Effective September 22, 2025
The latest GST update is here. At the GST Council meeting, Finance Minister Nirmala Sitharaman confirmed a simplified tax structure with just two main slabs — 5% and 18%. A higher 40% slab applies to luxury and sin goods, while health and life insurance now attract 0% GST.
This marks a big step in next gen GST reforms, also called GST 2.0. For families, the relief is clear — premiums on health and life policies are set to drop, while household essentials remain affordable. On the flip side, items like cigarettes, aerated drinks, and luxury cars will be taxed sharply higher.
GST New Rate List (Quick View)
| Item | New GST Rate |
|---|---|
| Daily essentials | 5% |
| Consumer durables | 18% |
| Small/entry-level cars | 18% |
| Health insurance | 0% |
| Life insurance | 0% |
| Luxury & sin goods (cigarettes, luxury cars, aerated drinks) | 40% |
| Cement & construction items | 18% |
| Gold | Check latest notification |
What’s Cheaper vs What’s Costlier
Cheaper
- Health insurance premiums
- Life insurance policies
- Daily essentials at 5%
- General medicines
Costlier
- Cigarettes & tobacco products
- Aerated drinks
- Luxury cars & SUVs
- Cement & tiles
In short, the government’s new GST rates lower the burden on households while keeping luxury and harmful consumption heavily taxed. These GST reforms 2025 are designed to simplify compliance and reshape spending habits across sectors.
