GST 2.0 kicks in today! Check what the new tax reforms mean for you - Here's 10 things you should know

The Modi-led NDA government’s next-generation GST reforms come into effect on Monday, September 22, 2025. The GST structure has been reduced to just two rates: 5% and 18%, replacing the earlier four slabs (5%, 12%, 18%, 28%). At the same time, luxury and sin goods will be taxed at 40% to ensure fairness and maintain government revenue. Credit: TIL Denny)

Household essentials like soaps, shampoos, toothpaste, tableware, and bicycles are now taxed at 5%, while packaged foods such as namkeens, bhujia, sauces, pasta, chocolates, coffee, and preserved meat have GST reduced from 12–18% to 5%.

Items like juices, coffee, tea, namkeen, bhujia, chocolates, and ice cream have seen price cuts to pass GST benefits directly to consumers. (Credit: AI image)

Farmers are set to benefit too. The GST on tractors up to 1800 cc has been cut from 12–18% to 5%, translating to savings of about Rs 40,000 per tractor, easing costs for the agriculture sector. These reforms mark a significant effort by the government to reduce the financial burden on households, boost consumption, and support both urban and rural buyers just ahead of the festive season.

All individual life insurance policies, including term plans, endowments, and ULIPs, are now exempt from GST. Even reinsurance on these policies falls under the exemption, making financial protection more affordable. (File Photo)

Electronics and appliances like TVs (LCD/LED), ACs, and dishwashers now attract 18% GST, down from 28%, improving affordability for middle-class households. (Credit: AI image/TIL Denny)

Two-wheelers (≤350cc), small cars, buses, trucks, three-wheelers, and auto parts now fall under 18% GST, down from 28%, reducing costs for consumers and boosting India’s automotive manufacturing and exports. (Credit: AI image/TIL Denny)

GST cuts on cement and construction materials are set to boost the housing sector, making homes and infrastructure projects more affordable. The move is also expected to increase real estate demand and create construction jobs. Key rate changes: Cement 28% to 18%, Marble/Granite/Sand-lime bricks 12% to 5%, Bamboo flooring, joinery, and wooden packing cases 12% to 5%. (Credit: AI image/TIL Denny)

Life-saving drugs and critical medical items see a GST cut from 12% to 0% or 5%, improving access to healthcare. Medical devices, spectacles, and diagnostic kits also benefit from lower rates, supporting both consumers and domestic manufacturing. (Credit: AI image/TIL Denny)

Major FMCG companies including Dabur, HUL, Nestle, ITC, Procter & Gamble, Emami, Amul, and RCPL have revised MRPs on a wide range of products, effective immediately. For example, Dabur cut the price of Real Juice 1L from Rs 130 to Rs 122, Chyawanprakash 900 gm from Rs 475 to Rs 440, and toothpastes like Dabur Red from Rs 153 to Rs 135. Nestle reduced Maggi 600 gm from Rs 120 to Rs 116 and Nescafé Gold from Rs 855 to Rs 755, while Procter & Gamble adjusted MRPs on Vicks, Head & Shoulders, and Pampers.

(File Photo)

Prime Minister Narendra Modi said the next generation GST reforms will boost savings and directly benefit every section of society, as he asserted that it is imperative to walk on the path of self-reliance to achieve the collective goal of Viksit Bharat by 2047.

In an open letter to Indians which he posted on X, Modi said that from September 22, next generation GST reforms have begun to make their presence felt, marking the start of a 'GST Bachat Utsav' or 'GST Savings Festival' across the country. (PTI: Photo)