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GST Savings Festival from September 22: What Gets Cheaper and What Becomes Costlier Under the New Tax System

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22nd September, 2025 11:04 IST

From September 22, 2025, India will roll out a revamped Goods and Services Tax (GST) structure, being promoted as the “GST Savings Festival” or Next-Generation GST. Finance Minister Nirmala Sitharaman said the reform will put more money into consumers’ hands while adding nearly ₹2 lakh crore of strength to the economy.

But what exactly will become cheaper, and what will get more expensive under this new system? Here’s a detailed breakdown.

Items That Will Get Cheaper

The new GST system aims to reduce the burden on daily essentials, medicines, stationery, and household goods.

  • Everyday essentials

    • UHT milk, packaged paneer, chhena

    • All Indian breads such as chapati, roti, paratha, parotta, khakhra, and even pizza bread

  • Life-saving medicines

    • 33 drugs and therapies for cancer and rare diseases, including Agalsidase Beta, Imiglucerase, Eptacog alfa, Daratumumab, Onasemnogene abeparvovec, Risdiplam, will now attract zero GST.

    • Many medicines that earlier carried 12% GST will now be tax-free.

  • School and office stationery

    • Items such as erasers, pencils, sharpeners, crayons, chalk, charcoal, notebooks, graph books, maps, atlases, and globes will now cost less.

  • Other consumer goods

    • Butter, biscuits, namkeen, jam, ketchup, fruit juice, dry fruits, ghee, ice cream, pastries, and sausages

    • Toiletries like soap, shampoo, hair oil, face cream, and shaving cream

    • Kitchen appliances and electronics including ACs, TVs, washing machines, and dishwashers will now fall under the 18% GST slab

    • Medical devices such as diagnostic kits and glucometers will attract just 5% GST

    • Cement for housing has been reduced from 28% to 18% GST

  • Services

    • Haircuts, salons, yoga centers, gyms, and health clubs will now have lower GST charges.

    • Items That Will Become Costlier

    While many essentials are cheaper, luxury and sin goods will face higher taxes.

  • Sin goods (40% GST)

    • Cigarettes, bidis, pan masala, gutka, chewing tobacco, and other tobacco products

    • Online gaming and betting will also attract 40% GST

  • Luxury vehicles

    • SUVs and MPVs with petrol engines above 1,200cc or diesel engines above 1,500cc, and longer than 4 meters

    • Motorcycles above 350cc

  • Aerated beverages

    • Carbonated soft drinks like Coca-Cola, Pepsi, Mountain Dew, Fanta, and other fizzy beverages will now attract 40% GST

  • 18% GST slab items

    • Dining at premium restaurants

    • Premium smartphones and imported gadgets

    • Consumer durables like refrigerators, washing machines, and air-conditioners

    • High-end salon and spa grooming services

    • What About Existing Stock?

    The government has clarified that the revised GST rates will also apply to old stock. Even if a product carries an older MRP, consumers will be charged according to the new GST slab. Companies are responsible for ensuring that the benefits of reduced GST are passed directly to customers.

    Special Rules for Medicines

    The National Pharmaceutical Pricing Authority (NPPA) has instructed drug and medical device manufacturers to update their MRP in line with the new GST rules. Updated price lists must be provided to dealers, retailers, state drug controllers, and government authorities so that revised rates are visible to consumers.

    What If a Shopkeeper Denies the Benefit?

    If a retailer refuses to pass on GST savings to customers, complaints can be filed. Offenders may face fines or even imprisonment.

    • National Consumer Helpline: 1800-11-4000

    • CBIC GST Helpline: 1800-1200-232

    • National Anti-Profiteering Authority Website: Complaints can be lodged here by submitting a bill copy along with the shopkeeper’s name and address.

    Bottom Line

    The GST Savings Festival is expected to bring relief to millions of households by making essential items, medicines, and services cheaper, while continuing to impose higher taxes on luxury and harmful goods. With strict monitoring in place, the government is determined to ensure that the benefits reach end consumers directly.

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