GST 2.0: what actually changed on 22 September 2025
The old four-slab structure (5/12/18/28%) is gone. Here's the new 5% and 18% structure, the 40% "sin and luxury" rate, and what moved where.
India's biggest GST rate overhaul since the tax launched in 2017 took effect on 22 September 2025, approved unanimously by the GST Council on 3 September 2025.
The old four-rate structure of 5%, 12%, 18% and 28% has mostly been collapsed into two rates: 5% for essential/"merit" goods, and 18% as the standard rate for most goods and services. A separate 40% rate now applies to sin and luxury goods — premium motorcycles above 350cc, tobacco, and similar categories — replacing the old 28%-plus-cess treatment.
Some concrete moves: refrigerators and air conditioners dropped from 28% to 18%, as did television sets. On the exempt side, individual health and life insurance premiums are now nil-rated, along with 33 lifesaving medicines and educational stationery.
A few categories are still transitioning: some tobacco-related items continue under the older structure temporarily and migrate via separate notifications, so don't assume every demerit good moved on day one. As always, the exact rate for a specific product depends on its HSN/SAC entry — check the CBIC notification for anything business-critical rather than relying on a summary like this one.
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