"Next-gen GST" will go into effect on September 22

 

By combining the previous 12% and 28% rates, the "Next-Gen GST Reform" rationalises the tax structure into two primary slabs of 5% and 18%. Additionally, a historic ruling exempts all individual health and life insurance plans from GST, which the minister referred to as a "historic Diwali gift" for the populace. 

Beginning on September 22, 2025, the majority of products and services will be subject to the updated GST rates.

Every mid-size and big car that has an engine more than 1500 cc or is longer than 4000 mm will now be subject to 40% GST (no compensating cess). For SUVs, MUVs, MPVs, and XUVs with a ground clearance of 170 mm or more, the same 40% rate is applicable.

Up to 350cc motorcycles: 18% , Over 350cc motorcycles: 40%

Dishwashers and air conditioners: down from 28% to 18 percent, The percentage of televisions and monitors is now consistently 18% (before, 28%).

A standard 18% GST will now be applied to all batteries falling under category 8507., Lithium-ion batteries used to make up 18% of the total, while other batteries made up 28%.

To avoid misclassification, the goal is to maintain comparable items at the same rate. "Other non-alcoholic beverages" are therefore included in the 40% slab.

Drinks made with plant-based milk, including soy, currently make up 5% of the total, down from most at 18% and soy at 12%.

Due to the Council's decision, the previous 12 percent and 28 percent tax slabs have been essentially eliminated, leaving only two slabs at 5 percent and 18 percent. Products that formerly paid 28 percent tax, such air conditioners and larger televisions, will now only pay 18 percent as part of the reorganisation. Likewise, depending on their classification, goods that were formerly subject to a 12 percent tax will now be subject to either a 5 percent or an 18 percent tax.