The GST Council meeting of September 2025 has brought important updates that will impact businesses, startups, and consumers across India. With an aim to simplify compliance, boost key sectors, and rationalize tax rates, several changes have been introduced.
In this article, we provide the full list of New GST rates effective from September 2025, along with their applicability on goods and services.
Table of Contents
Revised New GST Rates Structure (Sept 2025)
India continues with the multi-slab GST system, but some changes have been made in the applicable rates for specific goods and services.
| GST Slab | Rate | Applicability (Sept 2025 Update) |
|---|---|---|
| Exempt (0%) | 0% | Essential food items (milk, fruits, vegetables, cereals), education services, basic healthcare. |
| Lower Slab | 5% | Medicines, transport, affordable housing, electric vehicles (EVs), EV chargers. |
| 12% | Reduced rate for packaged food items, snacks, certain medical devices (new update from Sept 2025). | |
| 18% | Most services (insurance, telecom, financial services), electronics, industrial goods, software. | |
| 28% | Luxury goods – cars, tobacco, aerated drinks, betting, casinos, online gaming (face value). | |
| Special Rates | 0.25% / 3% | Precious stones (0.25%), gold and silver (3%), jewellery making charges rationalized (Sept 2025 update). |
Key GST Rate Changes in Sept 2025
1. Food & Packaged Products
- Ready-to-eat packaged foods, snacks, and beverages moved from 18% to 12%.
- Objective: reduce consumer burden and support FMCG sector.
2. Healthcare & Medical Equipment
- Selected medical devices, diagnostic kits, and life-saving drugs shifted from 18% to 12%.
- Regular medicines continue under 5% GST.
3. Electric Vehicles & Green Energy
- EVs and charging stations remain at 5%.
- From Sept 2025, EV batteries and spare parts also brought under 5% slab (earlier 18%).
- Major boost to the clean mobility sector.
4. Real Estate & Housing
- Affordable housing continues at 1% without ITC.
- Other residential housing remains at 5% without ITC.
- GST Council to consider ITC restoration for developers in future.
5. Tourism & Hospitality
- Hotels with tariff above ₹7,500/night earlier taxed at 18%–28%.
- Now rationalized to a flat 18% slab, making luxury stays cheaper.
6. Gold & Jewellery
- Gold and silver remain at 3%.
- Making charges (earlier taxed at 5%) now merged under 3% slab for simplification.
7. Online Gaming & Casinos
- No rollback on 28% GST on full face value.
- Industry demand for taxing only Gross Gaming Revenue (GGR) still under review.
Applicability of New Rates
- The revised GST rates are effective from 1st October 2025 (as per Council notification).
- Businesses must update their billing software, invoices, and GST returns to reflect the new rates.
- Any supplies made before the effective date will be taxed at old rates.
Impact on Businesses & Consumers
- FMCG & Food Sector → Relief for consumers due to reduction in packaged food GST.
- Healthcare Sector → Cheaper diagnostic kits and medical equipment.
- EV Industry → Big push for green mobility as spare parts and batteries move to 5%.
- Hospitality & Tourism → More competitive pricing due to uniform 18% GST slab.
- Jewellery Buyers → Simplified rate structure on gold and making charges.
- Gaming Industry → Continued pressure due to 28% GST.
Conclusion
The new GST rates effective from September 2025 aim to balance revenue collection with industry growth. While essential sectors like food, healthcare, EVs, and hospitality have received relief, areas like online gaming and luxury consumption continue to remain under higher slabs.
For businesses, timely compliance with the revised rates is critical to avoid penalties. For consumers, these changes mean a mix of savings and continued higher taxation on luxury spending.
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