From September 22, 2025, India has made GST (Goods and Services Tax) easier to understand. Instead of many confusing slabs, now we have only two main rates – 5% and 18%. A special 40% slab is only for luxury and harmful (sin) goods. Some items are even tax-free (0%).

1. 5% GST – Daily Essentials

This lower tax rate is for common items that people use every day.

👉 Example:

- Buying a bicycle for your child → only 5% GST.

- A packet of instant noodles or chocolate → 5% GST.

- Soap, shampoo, toothpaste → 5% GST.

- Paneer or bread → in many cases now even 0% GST.

This means middle-class families will spend less money on daily goods.

2. 18% GST – Standard Goods

This rate applies to most middle-range products.

👉 Example:

- A 32-inch TV or a fridge → 18% GST.

- Buying a Honda Activa scooter or a small car (Maruti Swift, Hyundai i10) → 18% GST.

- Bus and auto-rickshaw spare parts → 18% GST.

This rate is for items that are not daily needs but still commonly used.

3. 40% GST – Luxury & Sin Goods

This is the highest rate, only for luxury or harmful products.

👉 Example:

- A Mercedes or BMW car → 40% GST.

- Cigarettes, tobacco, alcohol, cold drinks → 40% GST.

- High-end superbikes → 40% GST.

This ensures that the rich and luxury buyers pay more, while common people save money.

4. 0% GST – Tax Free Items

Some essentials are completely tax-free now.

👉 Example:

- Life insurance premium for families → 0% GST.

- Health insurance policy → 0% GST.

- Basic medicines like paracetamol → 0% GST.

This helps lower medical and family expenses.

Conclusion

With the new GST rates:

- Household items are cheaper (good news for middle-class families).

- Luxury buyers pay more, which is fair.

- Business compliance is easier with fewer slabs.

Overall, GST 2025 is designed to reduce confusion and give relief to the common man.

About JP Associates

JP Associates is your trusted partner for GST services. We provide expert support in GST Return filing and GST Registration to help businesses stay compliant and stress-free.

📍 Address: B 1111, RK Iconic, Ayodhya Chowk, 150ft Ring Road, Rajkot

📞 Contact: 75675 16351

🌐 Website: www.jpassociate.co.in