GST reforms: New Goods and Services Tax to take effect from September 22: All you need to know | Interactive Dashboard

The Goods and Services Tax (GST) is set for its most significant revamp since 2017. Beginning September 22, 2025, the country will adopt a simplified two-tier tax system. The majority of goods and services will be taxed at 5% and 18%. A 40% tax will be levied on ultra luxury items.

The decision, taken at the 56th GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman, aims to make taxation more transparent and easier to comply with.

The current four-tier structure of 5%, 12%, 18%, and 28% often led to confusion and disputes over classification. Under GST 2.0, the majority of goods and services will now fall under just two rates:

• 5% – Essentials and daily-use items such as food grains and medicines

• 18% – Most standard goods and services including manufacturing, transport and services

At the same time, the government has introduced a special de-merit rate of 40% for sin and luxury goods, placing items such as tobacco, pan masala, aerated drinks, and premium vehicles under this new slab.

The Union Finance Ministry on Thursday (September 18, 2025) notified the revised Central GST (CGST) rates for goods. States will now issue corresponding notifications for State GST (SGST) rates, which will apply on goods and services from Monday (September 22, 2025).

The core objective of GST 2.0 is to streamline the country’s indirect tax system by cutting down the number of slabs and removing classification disputes. For consumers, the new structure is designed to bring in more clarity, fairness, and some protection against inflation.

Essential items like food grains, medicines, and daily-use goods will continue to be taxed at the lower 5% rate, ensuring affordability for households. Meanwhile, doing away with the 12% slab could make several mid-range products cheaper, offering direct relief to middle-class families.

Key takeaways from the GST 2.0:

The Union Government expects the new GST reforms to spur spending by making goods and services more affordable, leaving people with greater disposable income.

Here is the interactive dashboard with full list of goods and services and its rates:

If the above dashboard is not visible or incomplete, click here to exit AMP mode