New GST rates notifications issued on September 17, 2025, and published by the Ministry of Finance.

5% GST: Applies to essential items such as:
- Food & Household: Soaps, toothpaste, Indian breads, UHT milk, packaged paneer, namkeens, chocolates, biscuits, sugar confectionery, packaged water, and milk-based beverages.
- Medicines & Healthcare: Life-saving drugs and medicines reduced from 12% to 5% or zero-rated.
- Agriculture: Tractors, harvesters, irrigation equipment, and bio-pesticides reduced from 12% to 5%.
- Education: Exercise books, pencils, sharpeners, geometry boxes, and school supplies now at 0% GST.
18% GST: Replaces 28% on:
- Consumer Durables: TVs (LCD/LED >32”), ACs, dishwashers, and small cars.
- Services: Hotel stays up to ₹7,500/day, gyms, salons, barbers, and yoga services.
- Manufacturing: Processed foods, cement, toys, sports goods, and industrial job work.
40% GST: Imposed on luxury and demerit goods, including:
- Pan masala, tobacco, chewing tobacco, cigarettes, aerated drinks, yachts, private aircraft, and gambling.

The reforms were announced in September 2025 and became effective on September 22, 2025, ahead of the festive season.
The goal is to reduce the tax burden on the common man, boost consumption, simplify compliance, and strengthen MSMEs and manufacturing.
Fast-track refunds, simplified return filing, and automatic registration were introduced to ease business operations.
The new GST rates are detailed in notifications issued on September 17, 2025, and published by the Ministry of Finance.