GST Reform: What Gets Cheaper and What Gets Costlier

The GST Council, in its 56th meeting, has approved major changes to indirect tax rates, making many essential goods cheaper while raising taxes on sin goods and luxury items.

What Gets Cheaper

Daily essentials:
Staple foods like UHT milk, paneer, parathas, pizza bread, khakhra, and roti will now be tax-free. Items like butter, ghee, cheese, jams, sauces, soups, pasta, namkeens, and confectionery will carry only 5% GST, down from 12–18%. Dry fruits such as almonds, pistachios, cashews, dates, and citrus fruits also move to the 5% bracket.

Healthcare:
Life-saving medicines like Agalsidase Beta, Onasemnogene, Daratumumab, and Alectinib are now exempt from tax. Most medicines, medical devices, diagnostic kits, bandages, thermometers, and oxygen cylinders will be taxed at 5%, down from 12–18%.

Personal care and consumer goods:
Items like shampoos, soaps, hair oil, toothpaste, shaving products, talcum powder, toothbrushes, candles, and safety matches will now attract only 5% GST. Stationery products, toys, sports goods, handicrafts, and bamboo or cane furniture will also get cheaper.

Transport and housing:
Cement will be taxed at 18% instead of 28%. Tractors, bicycles, motorcycles under 350cc, and small cars with petrol or diesel engines below 1200–1500cc and under 4 meters in length will see lower tax rates. Electric and hybrid vehicles, ambulances, marble, granite blocks, and eco-friendly building materials such as particle boards from crop residue will also attract 5% GST.

What Gets Costlier

Tobacco and sin goods:
Pan masala, gutkha, chewing tobacco, and cigarettes will now be taxed at 40%, up from 28%. Soft drinks, caffeinated beverages, and fruit-based fizzy drinks are also in the 40% bracket.

Luxury items:
High-end products such as SUVs, large cars with engines above 1200–1500cc, motorcycles over 350cc, yachts, private jets, revolvers, and pistols will also attract 40% GST.

Other items:
Coal, lignite, and peat will be taxed at 18%, up from 5%. Biodiesel not blended with diesel will increase to 18% from 12%. Premium apparel and textiles priced over ₹2,500 per piece, as well as high-value cotton quilts, will also see a rise to 18%. Certain paper products, including kraft and uncoated paper, will carry 18% GST.