The GST Council’s landmark reform has reduced tax rates across a wide range of items, making daily essentials, healthcare, education, agriculture tools, automobiles, and electronic appliances more affordable. The decision, which comes into effect from September 22, 2025, is being billed as a “historic Diwali gift” for the common man.
Daily essentials at 5%
The biggest relief comes for households, with taxes on key items slashed to just 5%.
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Hair oil, shampoo, toothpaste, toilet soap bar, toothbrushes, shaving cream: 18% → 5%
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Butter, ghee, cheese, dairy spreads: 12% → 5%
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Pre-packaged namkeens, bhuja, mixtures: 12% → 5%
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Utensils: 12% → 5%
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Feeding bottles, napkins for babies, clinical diapers: 12% → 5%
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Sewing machines & parts: 12% → 5%
Healthcare relief
Healthcare has seen sharp cuts, with several items going tax-free.
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Individual health & life insurance: 18% → Nil
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Thermometers: 12% → 5%
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Medical grade oxygen: 12% → 5%
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Diagnostic kits & reagents: 12% → 5%
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Glucometer & test strips: 12% → 5%
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Corrective spectacles: 12% → 5%
Affordable education
Students and parents will benefit as basic education supplies are exempted.
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Maps, charts & globes: 12% → Nil
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Pencils, sharpeners, crayons & pastels: 12% → Nil
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Exercise books & notebooks: 12% → Nil
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Erasers: 5% → Nil
Support for farmers & agriculture
Key farming equipment now taxed lower to support rural demand.
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Tractor tyres & parts: 18% → 5%
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Tractors: 12% → 5%
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Bio-pesticides & micronutrients: 12% → 5%
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Drip irrigation systems & sprinklers: 12% → 5%
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Agricultural machines for soil prep, cultivation & harvesting: 12% → 5%
Automobiles made affordable
The auto sector also benefits, with GST rates lowered across segments.
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Petrol & petrol-hybrid cars (up to 1200cc/4000mm): 28% → 18%
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Diesel & diesel-hybrid cars (up to 1500cc/4000mm): 28% → 18%
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Three-wheelers: 28% → 18%
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Motorcycles (350cc & below): 28% → 18%
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Goods transport vehicles: 28% → 18%
Electronics & appliances cut to 18%
High-value consumer appliances see major relief.
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Air conditioners: 28% → 18%
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Televisions (above 32 inches, including LED & LCD TVs): 28% → 18%
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Monitors & projectors: 28% → 18%
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Dishwashing machines: 28% → 18%
A Diwali boost for consumers and economy
With these changes, everyday living costs will reduce significantly, especially for households, students, and farmers. The government expects the rationalised tax structure to boost consumption, improve compliance, and revive demand across multiple sectors.
