The GST Council approved a major rate rationalisation that comes into force on 22 September 2025. The central government issued a consolidated HSN-wise notification to implement the new schedule, aiming to simplify slabs and reduce retail prices for many items.
About the change
The reform reorganises goods into clearer schedules and narrows the effective universe of commonly used rates, with a stronger emphasis on lower rates for essentials and a standard rate for most other goods and services. The objective is to ease compliance and provide immediate relief to consumers ahead of the festive season. Official HSN-wise notifications list the exact items and rates.
New GST rates — headline points
- Major consolidation into dominant slabs (notably a lower slab for essentials and a standard slab for most items).
- Hundreds of lines were reclassed—many essential food and household items moved to lower or nil rates.
- Specific luxury/sin items remain at higher or special rates as listed in the official notification.
Effective date
The new GST structure and HSN-wise rates are effective from 22 September 2025. Businesses were required to update billing and ERP systems to reflect the new rates from this date.
All product groups with GST-cut impact (representative)
Below are groups that saw notable rate changes and consumer impact:
- Mobile phones and electronics: Several smartphone models and consumer electronics were moved to lower slabs — likely to reduce retail prices for a wide set of models.
- Automobiles (cars and two-wheelers): Selected models were re-slabbed to lower GST, lowering ex-showroom costs for many buyers.
- Dairy and food staples: Many processed dairy items and everyday staples were moved to 5% or zero rates, easing household bills.
- Energy and capital goods: Some power and renewable-energy inputs saw lower rates, which can reduce project capex for developers and utilities.
Product list — before and after (sample comparison)
- Smartphones: Previously taxed at higher bands (e.g., 12–18% on certain HSNs) → many now at a lower slab (product-specific).
- Cars & Bikes: Selected segments: 18–28% previously → lower slab for many models; savings vary by model and variant.
- Dairy & staples: 12–18% previously → many items now 5% or exempt, directly reducing retail prices.
Consumer benefits
Consumers should see direct reductions on grocery baskets, dairy, many electronics and some vehicles. The scale of benefit depends on HSN classification, existing dealer inventory, and retailer margins. Over time, simpler slabs may reduce compliance costs and improve supply-chain efficiency, helping pass on further savings.
PM Modi’s remarks
Prime Minister Narendra Modi described the reforms as pro-consumer and urged traders to pass the tax cuts to buyers. He framed the move as part of broader economic reforms intended to boost demand and ease living costs. Political reactions and industry commentary followed the rollout.
Disclaimer
This article summarises public reporting and the government notification on the new GST rates effective 22 September 2025. For HSN-wise authoritative rates and legal interpretation consult the CBIC notifications and your tax advisor. This is not tax or investment advice.
FAQs
Q1: When did the new GST rates take effect?
A: The revised GST structure became effective on 22 September 2025, as notified by the government.
Q2: Will mobile phone prices fall under the new slabs?
A: Many smartphones were reclassified into lower slabs; some models should become cheaper, but the exact change depends on HSN classification and retailer pricing.
Q3: Where can I find the official item-wise GST list?
A: The CBIC’s consolidated HSN-wise notification lists item-wise rates—refer to the official gazette and CBIC releases for authoritative details.
