Everyday essentials get cheaper
Products of daily use such as soaps, shampoos, baby diapers, razors, toothpaste, and packaged foods have seen tax rates drop to 5%, compared to earlier slabs of 12–18%. Popular food items including tea, coffee, butter, ghee, chocolates, namkeen, sweets, and ice-cream are now more affordable.
FMCG companies have already issued revised price lists with updated MRPs, expected to provide relief to millions of households.
Household appliances such as air conditioners, televisions above 32 inches, refrigerators, and dishwashers now attract 18% GST instead of the earlier 28%. This change is expected to make electronics more accessible during the festive shopping season.
India’s leading carmakers, including Maruti Suzuki, Tata Motors, Mahindra, Hyundai, Toyota, and Kia, have announced price reductions across several models. Two-wheelers are also seeing lower costs, adding to consumer sentiment ahead of Diwali.
Renewable energy and footwear gain
In a boost to clean energy, GST on solar solutions has been slashed from 12% to 5%, while power backup systems saw a reduction from 28% to 18%. Industry experts say the move will accelerate adoption of green technologies among households and businesses.
Footwear has also become cheaper, with all products priced up to ₹2,500 now taxed at 5%. Previously, only footwear up to ₹1,000 enjoyed the lower slab. The change is expected to benefit both consumers and organized players in the footwear market.
Items under the 40% slab
While most products got relief, the government has reserved a steep 40% GST for luxury and sin goods. This category includes cigarettes, tobacco products, pan masala, gutka, and online gambling. Soft drinks, premium smartphones, luxury cars, and high-end grooming services will also attract the top tax rate.
Officials said this structure aims to keep essential and growth-oriented items affordable while taxing luxury and harmful products at higher rates.
Impact on consumers and industry
Economists and market experts believe the GST 2.0 reforms will strengthen consumption demand and help industries recover faster post-pandemic. Analysts predict that lower rates on essential and mid-range goods will benefit India’s middle class, while the automobile and electronics sectors are likely to see a festive sales surge.
The government hopes the rationalisation will simplify compliance, improve tax collection, and bring transparency into the system. With Navratri marking the start of India’s peak shopping season, the GST cuts could not have come at a more strategic time.