GST rate changes from Sept 22 | What gets cheaper, what gets pricier?

The new Goods and Services Tax (GST) framework comes into effect on September 22 — coinciding with the first day of Navratri. The newly introduced 40% GST slab will make certain luxury and sin goods significantly costlier, while everyday essentials are set to become more affordable.

The GST Council, chaired by Finance Minister Nirmala Sitharaman, aims to simplify the tax structure while targeting high-consumption luxury and harmful goods for additional revenue.

What’s getting cheaper?

The Council has simplified the tax structure by keeping just two main slabs — 5% and 18% — for most products. Companies are already cutting prices to pass the benefits on to consumers.

Home Appliances

Air Conditioners: Cheaper by up to ₹4,500

Dishwashers: Price drop of up to ₹8,000

Brands like Voltas, Godrej, Daikin, Panasonic, and Haier have already announced new price lists.

Dairy Products (by Amul)

Butter (100g): ₹58 (down from ₹62)

Ghee (1 litre): ₹610 (down ₹40)

Cheese block (1kg): ₹545 (down ₹30)

Frozen paneer (200g): ₹95 (down from ₹99)

Over 700 items see price cuts, including milk, chocolates, ice creams, and bakery products.

Packaged Drinking Water

Rail Neer 1L: ₹14 (down from ₹15)

Rail Neer 500ml: ₹9 (down from ₹10)

New rates will apply at railway stations and in trains; private water brands may also follow.

Cars

Car makers like Maruti and Jeep are reducing prices on various models as GST rates drop.

Entry-level and mid-range cars will see the biggest price cuts.

What’s getting costlier?

At the same time, the government has introduced a new 40% GST slab, the highest so far, for luxury goods and so-called "sin goods" — items seen as harmful or non-essential.

Drinks & Beverages

Aerated water

Carbonated drinks

Caffeinated drinks

Flavored soft drinks

Energy drinks

All of these will now attract 40% GST, making them more expensive.

Luxury Vehicles

Cars with engine capacity above 1,200cc and longer than 4,000mm

Motorcycles with engine above 350cc

These include premium SUVs, sedans, and high-end bikes.

️Luxury Transport (Personal Use Only)

Yachts

Private jets

Racing cars

These will be taxed at 40% only when used for personal or recreational purposes, not commercial use.

Tobacco & Pan Masala: Costlier later, not now

The government has not yet applied the 40% GST on tobacco products like:

Pan masala

Gutkha

Cigarettes

Chewing tobacco

Raw tobacco

Bidis

These items already attract a compensation cess on top of GST. Finance Minister Nirmala Sitharaman confirmed the 40% tax will only apply after the government repays COVID-era loans taken to compensate states for GST losses.

Summary: Winners & Losers

Getting Cheaper (From Sept 22):

• Air conditioners
• Dishwashers
• Amul dairy products
• Bottled water (Rail Neer)
• Most budget & mid-range cars

Getting Costlier (From Sept 22):

• Soft drinks & energy drinks
• Large SUVs, luxury cars, and premium bikes
• Personal-use yachts, jets, and racing cars

To get costlier later:

Tobacco, pan masala, gutkha, bidis (once loans are repaid)