Following the September 2025 GST rate overhaul, numerous consumer goods and services have become cheaper, particularly those in the 5% and 18% tax slabs. Key items include everyday essentials (soap, shampoo, toothpaste), packaged foods (snacks, dairy products), household appliances (TVs, ACs), smaller cars, and two-wheelers.
GST on cement reduced from 28% to 18%, lowering housing and infrastructure costs. Healthcare made affordable with GST on medicines cut to 5%/Nil, while health insurance is made exempted from GST. Uniform 5% GST on drones introduced, supporting startups and the Make in India initiative.
FMCG, automobiles, consumer durables, and financial services are likely to benefit as reduced taxes spur demand. Q3. How can GST cuts impact the stock market?
Conclusion. In India, HSN codes and GST on clothing affect more than just compliance - they impact product pricing, buying strategies, and stock control. GST 2.0 has brought relief to taxpayers by making readymade garments below ₹2500 cheaper, but the banded garments become a bit more expensive with 18% GST on clothes.
Mother Dairy Revises Prices Following GST Reduction
Mother Dairy announced a price cut across several dairy items such as Ultra-High Temperature (UHT) milk, paneer, ghee, cheese, and ice creams due to a GST revision. UHT milk now attracts 0% GST, down from 5%, bringing the price of a 1-litre tetra pack from ₹77 to ₹75.
By lowering GST rates on daily food items, construction materials, gyms/fitness centres, and automobiles, the Government has not only reduced the financial burden on households but also advanced its long-term vision of promoting healthier lifestyles, affordable housing and transportation, and improved ease of living ...
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
The key categories of goods and services included under the special 40% GST slab are, Tobacco and related intoxicants as sin goods (e.g., cigarettes, bidis, pan masala, caffeinated drinks) Drinks with high sugar content and caffeinated.
Whether it's for personal hygiene or laundry, all are taxed at 18%. Detergent powders and washing agents attract 18% GST. The GST rate on liquid soap is also 18%, same as bar soap.
Sectors such as textiles, handicrafts, automobiles, footwear, food processing, and healthcare have been prioritised, with GST cuts lowering production costs, encouraging innovation, and supporting startups and MSMEs.
Growth stocks, particularly in technology industries, typically have benefited most from rate cuts. Lower discount rates have tended to make these companies' future earnings more valuable, providing a stronger tailwind for valuations.
With the revised GST compliance guidelines of The Department of Consumer Affairs; Weights and Measures Unit (Sept 18, 2025), manufacturers are allowed to sell old stock with unchanged MRPs and use old packaging till March 2026, only notifying wholesalers and retailers of price changes.
Essential food items and daily-use goods like Indian breads, UHT milk, paneer, namkeens, chocolates, shampoos, soaps, bicycles, and kitchenware are now cheaper under the new GST rates 2025.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
The Government: A Boost in Revenue
From a government standpoint, GST has been a resounding success in terms of revenue generation and increase in tax base. The number of Taxpayers is increasing from year to year and the same thing can be said about the collection of GST.
The 40% GST is now a single consolidated rate for sugar-added, flavoured, or carbonated drinks, including cola, lemonade, and fruit-based fizzy beverages. The previous 12% compensation cess has been removed.
GST Rate and Slab Changes in September 2025
GST rate cuts on 200 items happened from 22nd September 2025. 90% of items in the current 28% slab are moved to the 18% slab. Almost 99% of the items in the 12% slab are moved to the 5% slab.
Types of GST in India
CGST (Central Goods and Services Tax) SGST (State Goods and Services. IGST (Integrated Goods and Services Tax) UTGST (Union Territory Goods and Services Tax)
Good news is, Starting July 2025, the HST/GST credit has increase by 2.7%, helping low- and modest-income households stretch their budgets. This tax free quarterly payment can put hundreds of extra dollars into your pocket each year.
How to Avoid GST on Overseas Purchases Legally
New Deadline: September 30, 2025
A critical change: the $7,500 tax credit (and the $4,000 used EV credit) will expire on September 30, 2025. Any EV purchase or lease finalized on or before that date qualifies; after that, the incentive disappears, regardless of model or eligibility.
Consumers of 40% gst items- “sin” goods: tobacco, pan masala, sugary drinks, premium beverages etc. will face higher GST.
Key items exempted from GST: